Market Wrap: Cryptocurrencies Slide as Buyers Stick to the Sidelines
Traders are in no hurry to buy given regulatory concerns and muted volume.
Cryptocurrencies continued to slide as buyers appear to be taking some profits. Some analysts are now cautious on bitcoin’s short-term price direction given the recent loss of upside momentum.
Bitcoin declined toward a three-week low on Thursday around $56,000 before stabilizing near $58,000. BTC is down about 11% over the past week, compared with a 14% drop in ether over the same period.
“Downward momentum is hardly a good sign; pay attention to the cautious approach of bulls, which are not in a hurry to buy and waiting for more precise [entry] signals,” Alex Kuptsikevich, an analyst at FxPro, wrote in an email to CoinDesk.
- Bitcoin (BTC): $58,251, -3.63%
- Ether (ETH): $4,084, -4.13%
- S&P 500: $4,704, +0.34%
- Gold: $1,860, -0.36%
- 10-year Treasury yield closed at 1.58%
Other analysts pointed to regulatory developments as a possible reason for the crypto pullback.
“Central bank officials say changing trends and developments on the regulatory and monetary side could also halt the gains for digital assets,” Freddie Evans, a trader at the U.K.-based digital asset broker GlobalBlock, wrote in an email to CoinDesk.
On Thursday, U.S. lawmakers introduced a bill to amend the crypto-related provisions in the bipartisan infrastructure bill signed into law earlier this week, CoinDesk’s Nikhilesh De reported. The proposed amendments could clarify certain tax rules for crypto-related companies.
Muted bitcoin trading volume
Bitcoin’s trading volume declined over the past few days across major exchanges. Lower volume is typical when BTC trades in a tight range, between $57,000 and $65,000 over the past week.
Still, the seven-day moving average of spot BTC trading volume is slightly higher, suggesting that trading activity could eventually begin an upward trend.
“During the bull run this autumn, we haven’t seen the same big spikes in spot volumes as we did during the bullish breakout in the spring,” Arcane Research wrote in a report earlier this week.
Ether testing support
Ether, the world’s second-largest cryptocurrency by market capitalization, is testing initial support near $4,000. Similar to BTC, upside momentum has slowed over the past week after buyers failed to sustain an all-time price high around $4,800.
The relative strength index (RSI) on the daily chart is not yet oversold, although further downside in ETH appears to be limited toward $3,600.
Click here for technical analysis on bitcoin.
- Gaming tokens rally: SAND, the native cryptocurrency of metaverse platform The Sandbox, has rallied 85% since Tuesday to a new record high above $4.20. Earlier this week, the platform announced its highly anticipated play-to-earn metaverse event. Other gaming tokens including DVI and YGG have also rallied, reported CoinDesk’s Omkar Godbole.
- Maple Finance launches first DeFi syndicated loan: Maple, which specializes in liquidity pools made up of institutions, has launched its first syndicated loan for Alameda Research, the trading firm affiliated with global cryptocurrency exchange FTX. Syndicated loans involving a heavyweight paper trail and numerous middlemen were touted as a promising use for permissioned chains a few years ago, reported CoinDesk’s Ian Allison.
Most digital assets in the CoinDesk 20 ended the day lower.
Notable winners as of 21:00 UTC (4:00 p.m. ET):
- Algorand (ALGO): +18.11%
- Litecoin (LTC): -8.72%
- Chainlink (LINK): -7.16%
- Polygon (MATIC): -6.90%
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