Uncertainty Around the Short-Term Trajectory of Bitcoin (BTC) and Ethereum (ETH)

The crypto market has seen a broad decline over the past 24 hours, with Bitcoin (BTC) ending the week below a key technical level and market participants appearing uncertain about the near-term direction.

As usual, this move was accompanied by a high volume of leveraged derivatives, with long Bitcoin position liquidations hitting $12.7 million in the four hours between midnight and 9 p.m. 04:00 UTC Monday.

Source: Adobe/KarinR

Still, the level of liquidations is not out of the ordinary, with a sell-off as recently as Friday leading to even greater liquidations.

Source: Coinglass

Meanwhile, data from the cryptocurrency analysis and investment firm Coin shares, showed on Monday that cryptocurrency-backed investment funds have seen a new influx in the past week. In total, the week ended with inflows of $30 million, including $19 million in BTC-backed funds.

After Bitcoin, the second most popular crypto asset with investors last week was Ethereum (ETH), with $8.1 million in inflows. The multi-asset category was the only one to see outflows last week, with outflows totaling $2.3 million.

Source: CoinShares

It should be noted that the latest data released by CoinShares also includes a correction to the figures from the previous week, when $12 million in inflows were reported for the sector. After taking into account the late reporting of transactions, this figure has been adjusted to USD 343 million – the largest weekly flow seen at the cryptocurrency mutual fund level since November 2021.

These inflows were seen despite Bitcoin closing below the key 200-week moving average line last week. This $22,786 threshold is considered by many to be a key technical level that BTC has never traded below for an extended period of time, and the price of Bitcoin has been trading below since Sunday evening in Europe.

BTC weekly chart with 200 week moving average:

Source: TradingView

BTC is currently trading at $21,888, down 2.1% over the past 24 hours and up 5.9% for the week.

Besides Bitcoin, other cryptoassets have stood out at the time of writing, including ETH, down 2.4% in the past 24 hours to $1,522, and Solana (SOL), which traded up 3.2% to $38.90. SOL is up 1% on a 7-day basis, while ETH is up over 15% over the same timeframe.

“Signs of exhaustion” in the market

The Singapore-based crypto trading firm comments on the outlook for the crypto market ahead of the weekend, QCP capitalnoted the uncertainty regarding the continuation of the bullish momentum.

QCP Capital’s latest update marks an easing of the company’s bearish stance since early July, when it said its “positive outlook is waning” and warned that “any significant upside will be limited in the near term.”

Others, including the analysis company in the chain Glass nodepointed to some early signs of Bitcoin upside given the high transaction fees seen on the network since the collapse of the Terra (LUNA) network.

“A higher fee arrangement where [moyenne mobile sur 7 jours] is greater than [moyenne mobile sur 180 jours]is historically a signal of market recovery,” the firm wrote on Twitter. She also shared a chart showing how similar events have played out historically.

Source: Glassnode/via Twitter

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