Oversold Bitcoin remains at $50,000 as 'altcoins' bounce timidly
Bitcoin handles little change on Thursday, as it remains depressed around $50,000, a price level it is unable to fully sustain. However, its behavior in recent days suggests a clear consolidation after last weekend's 20% breakout, with short-term support at $46,000, while resistance remains in the $53,000 - $55,000 area. These prices served as support in the previous phase.
The risk appetite-driven rebound we saw in the markets helped cryptocurrencies recover, "but they still look vulnerable after the weekend plunge and any sudden shift in risk appetite could trigger another dip," commented Craig Erlam, analyst at Oanda.
The world's largest cryptocurrency is stuck in a short-term downtrend, defined by declining trading highs over the past month."Should it hold above $50,000 then the next test remains around $53,500, with a move above leaving it on a much stronger footing and perhaps signaling the end of the correction," noted Erlam. Analysts are optimistic, however, as technical indicators look oversold and the 'altcoins' are starting to show signs of being in the mood to bounce, like Ethereum, which lost around 10% during the recent market correction, leading the gains. Total capitalization remains around $2.36 trillion.
Fears that have weighed down the rest of the financial markets in recent weeks impact the appetite for cryptocurrencies. Namely, the slowdown in the U.S. economy or fears of the new variant of Covid-19, Omicron. Actually, experts draw attention to the fact that the digital asset behaves more like a risk asset than a safe haven, which has caused it to fall in line with the rest of the market.
Despite all of the above, technical analysts warn that the medium-term outlook remains bullish for the most traded of the digital currencies. However, a Natixis survey of 500 institutional investors from several countries - including four central banks, more than 20 sovereign wealth funds and more than 150 corporate pension plans - indicates that following the boom in this investment class after the last year, they are the "leading candidate" for a "major correction" in 2022.
APPEARANCE BEFORE THE U.S. CONGRESS OF THE CEO'S OF CRYPTO PLATFORMS
During the last few hours, the appearance of several CEOs of major US cryptocurrency companies before the US Congress has been in the news. Some of them appeared to present a united front to urge lawmakers to provide a clear regulatory framework for cryptocurrencies.
At Wednesday's hearing, titled "Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in America," Circle CEO Jeremy Allaire, FTX CEO Sam Bankman-Fried, Bitfury CEO Brian Brooks, Paxos CEO Chad Cascarilla, Stellar Development Foundation CEO Denelle Dixon, and Alesia Haas, CFO of Coinbase and CEO of its U.S. subsidiary, explained to U.S. lawmakers the challenges their companies face as stablecoin issuers and digital asset exchanges.
ETHEREUM'S 'ARROW GLACIER'
The Ethereum network, the number two cryptocurrency blockchain on the market, is continuing with the steps its developer community set for its transition to a proof-of-stake model from the current proof-of-work. Ethereum 2.0, or 'Eth2', is due to arrive in 2022 and is expected to represent a catalyst for the cryptoasset's value to $10,000, according to some forecasts. Much closer in time, the 'Arrow Glacier' update is not expected to affect investors.
Scheduled for December 9th, this Ethereum network upgrade succeeds the Berlin, London and Altair upgrades and is the only proposal included in the upgrade, according to Ethereum lead developer, Tim Beiko. The upgrade includes EIP-4345, which rules out the difficulty pump, "hopefully for the last time," until June 2022. It is anticipated that by then the merger will be completed and the network will operate with the consent of the proof of participation.