Bitcoin halted decline below $20,700 as the cryptocurrency sector tries to return to growth with a touch of improved sentiment on stock indices:
- Cryptocurrencies responded with further bullish momentum, correlated with US index contracts, which are now on the upside thanks to a relatively successful start to the earnings season for BigTech companies (Alphabet, Microsoft);
- Ethereum is once again rising faster than Bitcoin. The token gains 6% and trades at $1460. The king of cryptocurrencies gains less than 2%, but it is possible that in the event of a euphoric opening on Wall Street, the major cryptocurrency will return to levels of $22,000 and Ethereum will again try to cross the $1,500 mark;
- Investment bank Barclays recently pledged to support the Copper platform, which intends to raise $500 million to start investing in the cryptocurrency bear market. This confirms that a significant number of financial institutions still see upside potential in the cryptocurrency sector and are adjusting their strategy according to risk. It should be noted that the risk may be subjectively perceived as “more and more attractive” as the decline continues;
- According to data from Glassnode, Bitcoin is almost completely purged of short-term investors, which may indicate that a new cycle is emerging. As has happened in the past, tokens sold by short-term holders ended up in the hands of so-called HODLers who were not interested in the sale of Bitcoin, reducing the supply of cryptocurrency to the market’s wider horizons.
The URPD chart shows record demand around $20,000 and high interest in BTC accumulation around $30,000 and $40,000. The vast majority of tokens purchased since the start of 2022 appear to be in the hands of holders who are reluctant to sell, supporting the supply meltdown scenario. Source: Glass node
Bitcoin chart, H4 range. From a technical point of view, the largest cryptocurrency managed to break back above the psychological barrier of $21,000 and a rebound movement is currently underway. We can now consider the area of the 100-period exponential moving average (purple curve) as the nearest support zone. Source: xStation5
On technical analysis of the Ethereum chart, we also see a pullback from the $1400 psychological barrier, which was further reinforced by the boundary of the previous descending channel (dashed red line). Source: xStation 5
Polygon prices have bounced back from the 38.2% Fibonacci retracement area and are currently testing the 50-period exponential moving average (blue curve), which is further strengthened by the 23.6% Fibonacci retracement. If the buyers manage to break the aforementioned areas, the next notable constraint will be the descending trendline marked by the red dashed line. Source: xStation 5
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