Bitcoin (BTC) once again reaffirmed its correlation with the US stock markets as it took a beating after reports of underwhelming performance by PayPal and Meta emerged. BTC, which was trading near $38,000 yesterday, lost 5% in the last 24 hours to trade at $36,400. The overall crypto market was quick to react as the total market cap declined by 5.5% today. However, trade volumes across all exchanges surged by 19%. In this article, we are going to analyse the recent price actions of major cryptocurrencies and the short term outlook for BTC.
Bitcoin in Downtrend
In addition to the mounting pressure from Fed's interest rate hikes which are likely to happen starting March and underwhelming performance of tech companies, BTC faces an uphill task in breaking the macro downtrend that started at the beginning of November 2021. A descending channel pattern continues to play a crucial role in quashing every attempt by the bulls to get BTC back above $39,000. The image below demonstrates the descending channel pattern that BTC needs to break to resume an uptrend.
Source: Tradingview, Binance
Ethereum Dips, Others Bleed
Ethereum (ETH), which had a good recovery from the lows of $2,150, dipped alongside BTCâ€™s correction. ETH matched BTCâ€™s losses over the last day and negated a possibility of deeper correction. The local high at $2,810 will act as a major resistance while the support levels of $2,540, $2,440 and $2,370 should help in the short-term.
Top cryptocurrencies like Solana (SOL), Polkadot (DOT), Avalanche (AVAX), often touted as alternatives to scaling issues and high gas fees faced by Ethereum, took a 10% loss in the last 24 hours. Dogecoin (DOGE), the meme token popularised by Tesla CEO Elon Musk, is trading near critical territory as it is just a few cents away from $0.12, a price last seen in April 2021. DOGE is currently trading at $0.14, down by 5.6% today.
Quant (QNT) was the sole winner among the top 100 cryptocurrencies as it registered a 8% gain from the previous day. The strong performance in spite of the bearish climate has surprised the market participants. It is a known fact that several countries are working on launching their own central bank digital currencies (CBDCs). With so many CBDCs, which are based on blockchains, poised to emerge in the future, they are likely to face interoperability challenges. Quant Network aims to solve this and the surge in its token price is attributed to the interest shown by nations in developing CBDCs.
Short-term outlook for Bitcoin
Macro economic factors like US Federal Reserveâ€™s monetary policy, performance of global stocks and geo-political tensions continue to impact wider financial markets including the cryptocurrency market. However, according to on-chain data platform Whalemap, whales holding between 100 and 1,000 BTC continue to buy during the recent decline showing no signs of exhaustion. Analysts expect the market structure to be bearish below $39,000 for the near future.
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Disclaimer: This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.