Market Wrap: Bitcoin Stuck Near $56K, Ether Faces Short-Term Sell Pressure

Bitcoin traded in a narrowed range as Monday's sell-off appeared to subside and prices settled in the mid-$50,000 range for the most of Tuesday. 

Monday’s decline resulted in some $1.6 billion in derivatives bets being liquidated, second only to the record level that took place on Feb. 22, according to Norwegian blockchain analytics firm Arcane Research.

Read More: Bitcoin Eyes Bull Revival as Dip Below $54K Wipes Out Millions More in Leverage

“But on Feb. 22, the relative price decline in bitcoin was larger than on this Monday.” Arcane wrote Tuesday in its weekly newsletter. “The extreme liquidation levels this Monday then suggests that this time around even more traders applied higher degrees of leverage in their trades.”

Bitcoin found strong support at $54,000, blockchain data shows.

Glassnode’s UTXO Realized Price Distribution (URPD), which charts bitcoins based on the price at which they were last moved, indicates that 865,000 BTC were moved around the $54,000 to $58,000 range as of March 15, according to Arcane.

Read More: Bitcoin Holds Short-Term Support at $54K, Resistance Seen at $58K: Technical Analysis

At the same time, the all-time high price above $61,000 reached on Saturday appears to have alleviated some chart-following analysts' concerns the market might be forming a “double top.”

Double tops are an extremely bearish price chart pattern. After bitcoin pushed out new all-time highs in January and February, traders fretted over the possibility of a double top then, too, according to Annabelle Huang, partner at Hong Kong-based market maker Amber Group.

“The weekend breakthrough has lifted some of those pressures,” Huang said.

Ether (ETH) was down Tuesday, trading around $1,784.90 and sliding 0.28% in 24 hours as of 20:00 UTC (4:00 p.m. ET).

“Ether is currently struggling to push higher,” Arcane Research wrote. “Investors are getting impatient as the second-largest cryptocurrency hasn’t been able to surpass its all-time high from Feb. 20, while bitcoin has continued to new highs.”

Ether’s spot trading volume also has been flat, according to data from eight major spot crypto exchanges CoinDesk tracks.

The trading volume was nearly $3 billion on Feb. 20, when ether broke above $2,000 for the first time, followed by several volatile days with daily trading volume as high as around $5.4 billion. Yet, when ether was trying to eke out a new all-time high on March 13, trading volume was only about $1.6 billion.

By using the DeMarker Indicator, a charting tool that’s used to measure the demand of the underlying asset, ether “is flashing a short-term ‘sell’ signal,” said Katie Stockton, a technical analyst for Fairlead Strategies.

“A two-week consolidation phase appears likely, at the minimum,” Stockton said. And the “recent volatility has left the first key support for ether back below $1,300, dictating extra attention to risk management.”

Cardano, meanwhile, which aspires to rival Ethereum as a “smart-contract” blockchain, saw a double-digit percentage gain in the past 24 hours after the cryptocurrency exchangeCoinbase Pro announced that it would support trading in the token.

Read More: Coinbase Pro Adds Support for Cardano’s ADA

Digital assets on the CoinDesk 20 are mixed Tuesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

Notable losers:

Equities:

Commodities:

Treasurys: