The price of most major cryptoassets, including bitcoin (BTC) and ethereum (ETH) continued to fall on Monday, after mixed performance over the weekend for both of the two largest coins. The mixed market action has left traders uncertain about what to expect next, with some analysts saying the next near-term move will likely signal further moves in the same direction.
At 16:40 UTC, BTC traded at USD 42,335, down almost 3% over the past 24 hours and up 1% over the past 7 days. At the same time, ETH stood at USD 3,233, down over 4% for the past 24 hours and up 2% for the week.
14-day BTC price:
14-day ETH price:
In a weekly update from the on-chain analytics firm Glassnode, the current bitcoin market was described as in “a docile state,” with market participants now digesting what high inflation and tightening in monetary policy from the US Federal Reserve (the Fed) might mean for the number one cryptocurrency.
The change in tune from the Fed has “rattled the bitcoin market in the short term,” Glassnode wrote, adding that the risk now is that it is also “taking control over its medium term prospects.”
As far as the price of bitcoin goes, the analysts said that the medium-term direction is likely to be decided by the next near-term move. A strong bullish impulse could trigger a relief rally, while further weakness could cause traders who are already at a loss to “capitulate,” the analysts added.
Today’s update from Glassnode follows a warning from the same firm last week that leverage in the form of open interest in bitcoin futures had touched all-time highs.
With “extreme leverage” and on-chain metrics indicating “significantly oversold conditions,” Glassnode back then hinted that a bullish short squeeze would be the most likely outcome. So far, however, the predicted short squeeze has yet to materialize.
Commenting on the latest market action, Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, indicated in comments shared with Cryptonews.com that he was optimistic about the market over the coming days.
“After Bitcoin’s bounce from under USD 40,000 to USD 44,500, it slid off yesterday as equity markets took a tumble. It is now consolidating around USD 42,500, but once the equity market reaches stability I think crypto will bounce back to the USD 45-46k region in the coming days,” the analyst said.
Similar positive sentiment was also expressed in a recent report from crypto research firm Delphi Digital, which said that long-term holders have used January’s lower prices as an opportunity to accumulate more bitcoin.
The accumulation in January comes after long-term holders in November and December last year offloaded coins, the firm said. It added that the new trend can be seen as part of a transfer from short-term “weak hands” to long-term “strong hands.”
Meanwhile, a report from Binance Futures today said that bitcoin is currently at a “make or break point” around USD 43,000. Analysts at the exchange noted that a further “sustained dip” below USD 41,000 – USD 37,000 could trigger a larger selloff that could potentially take BTC down to its 100-week moving average of around USD 30,000.
“It appears that traders are growing pessimistic about bitcoin’s future price action as only 67.82% of all accounts remain net-long,” the report added about the outlook for the number one cryptocurrency.
Ethereum, on its end, has largely mirrored bitcoin’s price movements since jobs numbers in the US on January 7 sent both the stock market and the two largest cryptos lower.
Following an initial sell-off after the data release, however, ETH spent last week regaining some ground, with its price now about 10% up from its low of USD 2,928 from last Monday, despite a sell-off today.
The second-most valuable cryptoasset remains down by about 33% from its all-time high of around USD 4,868 from November 10 last year. Bitcoin, meanwhile, is down by around 38% from its November 13 all-time high of USD 69,000.
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