Cryptocurrencies Went Down Out Of Consolidation

On Thursday, Bitcoin was down 1.1%, ending the day at around $29.5K, despite a buoyant stock market performance. Selling resumed on Friday morning, pushing the price back to $28.9K. The observed divergence is bucking the trend of close correlation that has developed over the last few days.

Yesterday’s sharp 5.5% dip in BTCUSD within hours to $28K was much less of a move than expected, as there was more than a 3% rise in the Nasdaq in the background. As a result, bitcoin was sharply recovered due to increased risk appetite.

As a result, on the intraday charts, the converging triangle has turned into a channel with more frequent tests of the lower boundary near $29K. In our view, the previous consolidation might be just another phase of consolidation, which, when completed, would quickly take the price to the next lower level, as it did from April to May.

The final target of the central mass of bears might be the area of $20-23k, but the movement there might be stretched in time and decomposed into stages.

Confirming that bears dominate the crypto market is Ethereum, which has lost about 10% in the last 24 hours to $1750, finding itself in a lower bound since April 2021. In ETHUSD, a final landing is seen in the $1200-1300 area.

Other altcoins in the top 10 have fallen from 2% (XRP) to 13.8% (Solana).

Total cryptocurrency market capitalisation, according to CoinMarketCap, fell 5% overnight to $1.20 trillion.

The cryptocurrency fear and greed index was unchanged by Friday, remaining at 12 points (‘extreme fear’) on the back of solid Bitcoin momentum.

Bitcoin’s mining difficulty fell by 4.33% to 29.9 trillion hashes, the most significant drop last July. According to Arcane Research, the profitability of mining continues to plummet.

The CEO of Coinbase, the largest US cryptocurrency exchange, said the crypto industry’s history and prospects are convincing more US congress members to support the development of digital assets.

Investment management firm ARK Investment Management has reapplied to the SEC to launch a bitcoin-ETF.

Tether, the issuer of the USDT stablecoin, has launched a new stablecoin cryptocurrency, MXNT, pegged to the Mexican peso. It will be moveable on Ethereum, Tron and Polygon blockchains.

About the author

Alex Kuptsikevich is a financial market professional with 16-years’ experience and a senior financial analyst at FxPro. He is the author of daily reviews on the impact of economic events with comments featured in top international and Russian media. Alex covers fundamental analysis, global markets, the foreign exchange market, gold, oil, and cryptocurrencies in his analytical pieces. As the senior financial analyst at FxPro, Alex is a guest expert in 1-tier global media such as Forbes, Coindesk, Euromoney and Morning Star.