Bitcoin Bulls Are in No Hurry

Fragile Sentiment Tested as Breadth Weakens Across Digital Assets

The crypto market has taken another step downwards, losing just over 1% in the last 24 hours to $2.83T. This marks a breakout from the range seen over the last few days, with an attempt to establish a downtrend this week. The bulls may be simply gathering strength ahead of the next upward surge. However, in the short term, the situation looks rather worrying against the backdrop of weakening stock indices and the bond market, as well as continued flight to the safe-haven US dollar.

What makes this all the more interesting is that movements in the cryptocurrency market over the past day have been mixed. Among the most actively traded coins, the top performers were Near (+4.9%), Cosmos (+1.5%) and Tron (+0.5%). That said, the ratio of falling to rising coins is currently around 9:1. At the other end of the spectrum are Uniswap (−5.9%), Litecoin (−5.2%) and XRP (−5.1%).

The crypto market sentiment index has slipped to 64, remaining in the ‘greed’ zone but falling to its lowest level since 18 September. That said, we have observed a shift into bull-market territory since the second half of August, when the indicator confidently moved out of the ‘fear’ zone into ‘greed’, consolidating above 50. The ability to remain in the upper half of the spectrum could prove an important psychological boost for retail traders in the coming days, while a break below this level could intensify the sell-off.

Bitcoin is trading below $83K at the start of European trading, marking its fourth consecutive day of decline. Significant downside signal levels are already in view, and price action near them could reveal a great deal about market sentiment. The $80.5K–$81.5K range encompasses last month’s local highs and the 50-day moving average.

It may not be difficult for the bears to push the price into this area. It is also worth keeping a close eye on whether this attracts bargain hunters or forces buyers with margin positions to capitulate. In the former case, we can expect a rapid retest of the highs; in the latter, a sharp drop, like a high-speed lift, to $76K (recent lows) or $72K (the 200-day MA).

Crypto News

Investors are buying Bitcoin sluggishly on the spot market, while futures traders are in no hurry to build up their positions. The Coinbase Premium Index remains negative; however, demand for BTC via exchange-traded funds (ETFs) persists, according to CryptoQuant.

Bitcoin’s exchange supply has fallen to 6.50% of the total BTC supply, which is a bullish signal, according to Santiment. The steady outflow of coins may indicate that investors are moving BTC into long-term storage rather than preparing to sell.

Bitmine will stop buying the second-largest cryptocurrency as soon as it has accumulated 5% of the total ETH supply, said the company’s Chairman, Tom Lee. Until recently, he had suggested that Bitmine’s reserves might exceed this level.

According to Arkham, US authorities have transferred bitcoins and BNB totalling around $103 million from their crypto wallets. Most of the cryptocurrency was transferred to the Coinbase Prime trading platform, although there is as yet no confirmation of the sale of these assets.

Analyst Doctor Profit, who last year predicted the start of a bear market and a fall in BTC to $60K, is once again opening short positions on Bitcoin. The main set of positions is in the $86.5K–$89.5K range.

The FxPro Analyst Team