What's Happening in the Market
Cryptocurrency has dropped by a little over one percent over the past 24 hours, and total market capitalization has fallen to $2.83 trillion. It appears we’ve moved outside our usual price ranges, and a downward trend is emerging this week. On the one hand, we can hope that the “bulls” are simply gathering strength before their next rally. But from a short-term perspective, the picture isn’t very encouraging: stock indices and bonds are weakening, and investors are increasingly turning to the safe-haven dollar.
Interestingly, yesterday’s cryptocurrency price movements were very mixed. The top gainers were Near (+4.9%), Cosmos (+1.5%), and Tron (+0.5%). But if we look at the raw numbers, there are currently nine times as many coins falling as there are rising. At the very bottom of the list were Uniswap (−5.9%), Litecoin (−5.2%), and XRP (−5.1%).
The sentiment index dropped to 64. This is still in the “greed” zone, but the reading is the lowest since September 18. Overall, we’ve been in a bullish trend since late August, as the indicator moved from the fear zone into the greed zone and has remained above 50. If we stay in the upper part of the scale, this will encourage retail investors. But if we fall below that level, sell-offs could intensify.
At the start of the European session, Bitcoin is trading below $83,000, marking its fourth consecutive day of decline. Ahead lie key levels that will reveal what people are actually expecting. The previous local highs for the month and the 50-day moving average are lurking in the 80.5K–81.5K range. It won’t be difficult for the “bears” to break through this zone. The question then is whether this decline will attract bargain hunters or force buyers with large positions to capitulate. If buyers step in, we’ll see a rapid rally. If panic sets in, however, the price could plummet to 76,000 or even 72,000, where the 200-day moving average is located.
What’s in the News
In the spot market, investors are reluctant to buy Bitcoin, and futures traders are in no hurry to open new positions. The premium on Coinbase is still negative, but according to CryptoQuant, demand for BTC via ETFs isn’t falling.
Analysts at Santiment noted that the volume of Bitcoin on exchanges has shrunk to 6.50% of the total supply. This is a good sign for the bulls. It appears that people are moving their coins to cold storage rather than preparing to sell them.
BitMine CEO Tom Lee stated that the company will stop buying Ether as soon as its holdings reach 5% of the total ETH supply. Previously, he even suggested that they might accumulate much more.
According to Arkham, U.S. authorities transferred approximately $103 million worth of Bitcoin and BNB from their wallets. Most of it went to Coinbase Prime, but so far no one knows if they plan to sell it.
Incidentally, analyst Doctor Profit, who last year predicted a bear market and a drop in Bitcoin to 60,000, is once again betting on a decline. He is opening short positions in the 86.5K–89.5K range.