Bitcoin rebounds from two-week lows, but can't find 'momentum'
The cryptocurrency market is unwinding from its recent lows of more than two weeks on Tuesday. Both bitcoin and most of the major altcoins embark on a short-term rebound, but without abandoning the price range to which they are anchored. The queen of cryptos eased down to a low of $4,580 on Monday, its worst exchange rate since the December 4th 'flash crash', while Ethereum and other tokens also traded lower. Nonetheless, they are advancing about 3%, 24 hours later, as they try to find 'momentum'.
Bitcoin still faces medium-term bearish pressure as charts suggest the world's most traded cryptocurrency is "not yet oversold," according to Katie Stockton, founder and managing partner of Fairlead Strategies. At the same time, trading volume on major trading platforms remained low on Monday, according to data compiled by 'CoinDesk'.
Bulls have been defending the 200-day simple moving average slightly above $47,000 over the past few days, but have not been able to push the price above the 20-day exponential moving average ($49,622), as technical analysis indicates. This demonstrates the lack of demand at the higher levels, as the bearish try to push the price below $46,000. If Tuesday's rebound is denied, there are risks that Bitcoin could end up at $42,000 in the coming days. Also, market watchers note that volumes remain low on crypto exchanges as well.
"Falling trading volumes could complicate price action," stated Edward Moya, senior market analyst at Oanda, noting that Bitcoin's price could be "very choppy" in the coming weeks. "Many investors remain bullish for the long term and uncertainty about potential short-term pain has many traders waiting until Bitcoin falls towards the $40,000 level," he explained.
However, according to other experts, Tuesday's behavior is nothing more than a continuation of what was seen last week, when the virtual currency failed in any attempt to break above $50,000, where significant resistance resides. "After a brief rally to above $49,000, the cryptoasset has continued a downward march," stated Simon Peters, market analyst at eToro.
Ethereum, meanwhile, faces a similar situation, as its market capitalization fell below $450 billion on Monday, when the cryptoasset dropped nearly 5%. Since touching an all-time high of nearly $4,900 on November 10th, Ether - the Ethereum network's native unit - has lost roughly 25% of its value and has hovered in recent days below $4,000, where a resistance that previously acted as a formidable support now stands. Ether rises just above this level on Tuesday and its market value recovers to $475 billion.
Total capitalization rises to $2.24 trillion, on a day when the limelight shines on some tokens that have reached highs. LUNA, the native token of the Terra blockchain, has stretched its rally since last week, recording a new all-time high by surpassing $82 and accumulating rises since last week of almost 50%. Defi Llama´s data showed that the total locked value, or the dollar value of all tokens locked in the smart contract built on a blockchain. Terra had surpassed Binance Smart Chain, on Monday. Shiba Inu is up nearly 10% in the last 24 hours and Avalanche is up 11%.
Overall, the market capitalization of digital currencies has fallen by almost $800 billion in the last 5 weeks. After reaching an all-time high market cap of $3 trillion, the total value of cryptoassets has gradually declined over the past 5 weeks, in line with declines for Bitcoin of around 33% from its all-time highs.