The cryptocurrency market is currently experiencing a notable downturn, having lost approximately 1.4% in the past 24 hours, bringing its total market capitalization down to $3.29 trillion. For the last ten days, the market has predominantly fluctuated between $3.3 trillion and $3.4 trillion, a range reminiscent of late November when many positions were similarly unsettled. This recent movement aligns with the classic 61.8% Fibonacci retracement level, derived from the early November rally to the mid-December peak.
Current Bitcoin Trends
Bitcoin’s price has dipped to $93,500, slipping below the crucial 50-day moving average following the Christmas period. This recent decline mirrors the broader market trend, as Bitcoin approaches the 61.8% retracement level. A critical threshold to watch is the $93,000 mark; if Bitcoin falls below this, it could signal a break in the short-term trend, potentially leading to a deeper correction that might erase the gains accumulated in November and December.
Ethereum’s Resilience
In contrast to Bitcoin’s struggles, Ethereum has shown signs of strength, gaining 0.6% in the same period. The cryptocurrency has attracted buyers as it approached the $3,300 level, establishing a positive trend amidst the market’s overall downturn.
Market Dynamics and ETF Insights
The week has seen significant shifts in the exchange-traded fund (ETF) landscape. Bitcoin ETFs experienced net outflows of $387.5 million, the highest figure recorded since early September, breaking a three-week streak of inflows. Since their inception in January, cumulative inflows into Bitcoin ETFs have reached $35.66 billion. Conversely, Ethereum ETFs reported net inflows of $349.2 million, marking the fifth consecutive week of positive momentum, with total inflows since July hitting $2.68 billion.
New Developments in the Crypto Space
Strive Asset Management recently filed to introduce a bond ETF aimed at companies involved in Bitcoin strategies, such as MicroStrategy. This initiative is led by Vivek Ramaswamy, who has also partnered with Elon Musk on the DOGE project during the previous administration.
Expert Opinions
Despite the current bearish sentiment, CryptoQuant CEO Ki Young Ju maintains that a definitive bearish trend in the Bitcoin market has yet to materialize and believes that prices are still below their peak potential. He forecasts that Bitcoin could see a rise of over 30% in the near future.
On the other hand, a contributor from CryptoQuant, known as IT Tech, warns that selling pressure for Bitcoin may intensify in the coming days. He notes an increase in Bitcoin reserves on centralized exchanges, with an addition of approximately 20,000 BTC in recent days, suggesting a shift in market dynamics that traders should monitor closely.
