Bitcoin (BTC) is coming off five straight days of losses that saw the BTC/USDT pair dip from five-month highs of over US$24,200 to lows of last Thursday of US$22,600.
A strong US dollar had to take most of the blame; the greenback rallied after the latest Federal Reserve interest rate hike of 25 bps. Shabby tech stock earnings from the AAA set – Apple, Alphabet and Amazon – only made things worse.
But BTC longer traders have seen a bit of relief today, with the benchmark cryptocurrency adding 0.75% against the dollar, bringing the pair above US$22,900 and causing around US$15mln in short liquidations.
Traders will be gunning for a break above the US$23,000 resistance line to bring bitcoin back into the 23k to 24k channel which served as something of a safety zone prior to the latest dip.
Bitcoin’s meteoric January rally was derided as a bull trap by many analysts who scoffed at the 40% gains enjoyed by the coin. Perhaps in an act of schadenfreude, the 7% given back in February represented a trap of the ursine persuasion.
Since dovish sentiment has proved to be a strong catalyst for risk assets lately, investors would be wise to keep an eye on the economic calendar and monetary policy hints from the Fed, and to a lesser extent the Bank of England and European Central Bank.
Supporting the bull argument, bitcoin finally achieved the fabled ‘golden cross’, with the 50-day moving average moving above the 200-day moving average.
Bitcoin’s golden cross: A strong base for the bulls? – Source: binance.com
Technical analyst boffins see this as a harbinger of a pending rally, and in fairness, there is historical precedent to support the theory.
Ethereum (ETH) bounced off US$1,600 on Monday and has since added around 2% to US$1,630.
Resistance appears to be mounted at US$1,645, going by the ETH/USDT trading pair’s depth chart on Binance.
Shiba Inu leads the altcoin pack
The market-weighed CoinDesk Market Index (CMI) added 0.3% overnight, with most gains seen in Tuesday’s early hours.
Across the week, the CMI is 2% higher, suggesting strength, or at least consistency, in the broader altcoin market.
When removing bitcoin from the equation altogether, the altcoin market has added over 3.5% week on week, encouraged by a few particularly strong cryptocurrencies including Polygon (MATIC) and the Shiba Inu (SHIB) meme coin.
SHIB has been particularly strong, having rallied some 18% in the past seven days as enthusiasts of the meme coin get excited about the pending Shibarium scalability upgrade.
SHIB has rallied over 25% against its main meme coin competitor Dogecoin (DOGE) in the past seven days.
SHIB/DOGE: One of the strongest plays lately – Source: binance.com
Among the poorest performers so far this month are Aptos (APT), the blockchain launched by ex-Facebook alumni, lending protocol Nexo (NEXO), iFinex’s LEO token, and privacy coin Monero (XMR), all of which have dipped in the mid-to-high single digits.
Global cryptocurrency market capitalisation currently stands at US$1.066tn, while total value locked cross all decentralised finance (DeFi) protocols is around US$48.8bn.