What not to miss if you are interested in cryptocurrencies: Bitcoin continues to decline as the momentum fades

Bitcoin (BTC) fell 6% on Tuesday, approaching support levels, which is the price level below which an asset does not drop for a while, to around $ 20,500. The drop sent BTC’s price around 36% below the 200-day moving average of $ 32,000.

Bitcoin’s decline is accompanied by a decline in its Relative Strength Index (RSI) to 41. The RSI is an indicator that measures the speed and magnitude of price movements. Often used as a proxy for momentum (especially when assets are trending), levels of 70 and above are often interpreted as an indication that an asset (in this case BTC) is overbought. Levels of 30 or less often indicate that an asset is oversold.

This article originally appeared on Market Wrap, CoinDesk’s daily newsletter that dives into what is happening in today’s cryptocurrency markets. Sign up to have it delivered to your inbox every day.

In traditional equity markets, the S&P 500 fell 0.7% and the Nasdaq index fell 1.9%. BTC’s correlation coefficients with the S&P 500 and Nasdaq are currently 0.73 and 0.78, respectively. Recall that the correlation coefficients vary between 0 and 1.0, with higher values ​​indicating a stronger relationship between assets.

The price of Ether (ETH) fell 11% in trading on Tuesday. Its correlation coefficient levels to the S&P 500 and Nasdaq are currently 0.70 and 0.71.

Altcoins were also trading in negative territory on Tuesday, with Polygon’s MATIC and Chainlink’s LINK down 11% and 9% respectively.

● Bitcoin (BTC): $ 20,921 -5.5%.

● S&P 500 Daily Close: 3,921.05 -1.2%

● Gold: $ 1,716 per troy ounce -0.2%.

● Ten-Year Daily Closing Treasury Yield: 2.79% -0.03.

The prices of bitcoin, ether and gold are taken around 4:00 pm New York time. Bitcoin is CoinDesk’s Bitcoin Price Index (XBX); Ether is CoinDesk’s Ether Price Index (ETX); gold is the COMEX spot price. Information on the CoinDesk indices is available at coindesk.com/indices.

The cryptocurrency markets appear to be in risk-off mode to start the week

Bitcoin was again weak in trading on Tuesday as its price fell another 6%, following a 5.7% drop on Monday, as investors reverted to more risk-averse strategies. This might interest you: Binance and Cardano founders reach Ukraine, Bitcoin donations increase.

From a technical point of view, BTC broke below the 10 and 20 period exponential moving averages (EMA). Additionally, the 10-period exponential moving average has started moving below the 20-period exponential moving average, which traders may see as a short-term decline. Bitcoin’s price is challenging the $ 20,500 support level, as suggested by Monday’s Market Wrap. Intraday volume is approaching average levels over the past 20 trading days, which adds credit to the strength of the move.

The RSI levels have dropped to 41, which most investors will likely interpret as neutral, as it sits somewhere between the overbought and oversold benchmarks 70 and 30. While no technical indicator should be considered purely predictive, it is interesting examine the recent history of BTC as RSI levels approached 70.

So far, in 2022, BTC’s RSI levels have approached or exceeded 70 on three occasions, on February 7, March 27 and July 19 (70, 75.34 and 69.01 respectively). Looking at BTC prices 30 days after the first two occasions, we see drops of 13% and 16%, with the RSI falling to 40.52 and 41.78.

Right now, BTC is 11% below its July 19 level, while the RSI has dropped to 41. A repeat of recent price behavior would imply that BTC could be trading in a relatively flat range over the course of the year. three weeks.

One thing to consider when it comes to on-chain data is the bitcoin put / call ratio between exchanges. For clarity, this metric divides the volume of put options purchased by the volume of call options purchased in the last 24 hours.

The buyer of a put buys the right to sell at a certain price, while the buyer of a call buys the right to buy at a specific price. The ratio of put and call options can be used as an indication of trader sentiment.

As more and more traders seek protection from potential price falls, the put / call ratio is likely to rise. The reverse is true when traders wish to take advantage of expected price increases (i.e. the put / call ratio decreases).

Recent increases in the put / call ratio imply that traders are buying downside protection to protect themselves from further price falls. Furthermore, the rationale for this move is, at least in part, to reduce exposure ahead of Wednesday’s Federal Open Market Committee meeting, which is expected to announce interest rates, and Thursday’s release of gross domestic product data. (GDP) US

Tether finds stable parity with the dollar: the issuer’s USDT stablecoin has found stability for the first time in more than two months since the collapse of the Earth. If the USDT has passed the market resistance test with a return to normal, concerns about its reserves will persist, according to a trader. Read more here.

The outlook for the Ether chart darkens as prices fall: The price of Ether (ETH) recently dropped below $ 1,400, extending Monday’s 10% drop, its largest one-day percentage drop for over a month. An expected rise in interest rates appears to overshadow Ether’s optimism. Read more here.

Biggie Smalls Estate Goes Crypto: Non-Fungible Token Market (NFT) OneOf is launching its first collaboration with the rap legend’s estate, titled “Sky’s the Limit”. This collaboration allows NFT holders to vote for the license of one of the late rapper’s famous freestyles.

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Be vigilant and consult your financial advisor before making any investment decisions. Mirror-Mag cannot be held responsible in case of bad investments. Before using any third party service, you should do your research.

Thomas E.
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