Bitcoin And Ethereum Price Drops: Was It All A Trick?
Bitcoin (BTC) is coming off a five-day losing streak that saw the BTC/USDT pair fall from five-month highs of over US$24,200 to lows of US$22,600 last Thursday.
The strong U.S. dollar had to bear the brunt of the blame; the greenback rallied following the latest Federal Reserve interest rate hike of 25 basis points. Poor earnings from the AAA group – Apple, Alphabet, and Amazon – exacerbated the situation.
Longer-term BTC traders have seen some relief today, with the benchmark cryptocurrency adding 0.75% against the dollar, pushing the pair above US$22,900 and causing around US$15 million in short liquidations.
The US$23,000 resistance line will be the target for traders as they attempt to push bitcoin back into the 23k to 24k channel, which acted as a sort of safety zone before the most recent dip.
Many analysts ridiculed Bitcoin’s sharp rise in January as a bull trap and mocked the coin’s 40% gains. The 7% offered in February may have been an attempt at schadenfreude or an ursine persuasion trap.
Investors would be wise to keep an eye on the economic calendar and monetary policy hints from the Fed and, to a lesser extent, the Bank of England and European Central Bank, given that dovish sentiment has recently proven to be a potent catalyst for risk assets.
Also Read | According To Charlie Munger, The United States Should Ban Cryptocurrencies In The Same Way That China Has Done
Bitcoin finally achieved the fabled ‘golden cross,’ with the 50-day moving average crossing above the 200-day moving average, bolstering the bull case.
Technical analysts see this as a sign of an impending rally, and there is historical precedent to back up the theory.
On Monday, Ethereum (ETH) bounced off $1,600 and gained about 2% to $1,630.
According to the depth chart of the ETH/USDT trading pair on Binance, resistance appears to be mounted at $1,645.
Shiba Inu is the leader of the altcoin pack
The market-weighted CoinDesk Market Index (CMI) rose 0.3% overnight, with most gains occurring in Tuesday’s early hours.
The CMI is 2% higher over the week, indicating strength or consistency in the broader altcoin market.
When bitcoin is removed from the equation, the altcoin market has increased by more than 3.5% weekly, boosted by a few particularly strong cryptocurrencies such as Polygon (MATIC) and the Shiba Inu (SHIB) meme coin.
SHIB has been particularly strong, rising 18% in the last seven days as meme coin fans get excited about the upcoming Shibarium scalability upgrade.
In the last seven days, SHIB has gained more than 25% against its main meme coin competitor Dogecoin (DOGE).
Aptos (APT), the blockchain launched by ex-Facebook employees, Nexo (NEXO), iFinex’s LEO token, and privacy coin Monero (XMR) have all dipped in the mid-to-high single digits so far this month.
According to the global cryptocurrency market capitalisation, the total value locked across all decentralised finance (DeFi) protocols is currently around US$48.8 billion.
Also Read | GOLDMAN SACHS: BITCOIN IS THE BEST PERFORMING ASSET IN 2023