Good morning. Here’s what’s happening:
Market moves: Bitcoin continued to trade in a tight range, while ether turned to green.
Technician’s take: Some price-chart indicators show the potential for a short-term BTC bounce if support holds.
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Bitcoin continued to trade in a narrow range during U.S. trading hours on Tuesday, while ether reversed Monday’s loss, turning to green.
At the time of writing, bitcoin, the oldest cryptocurrency, was trading slightly above $46,000, little changed in the past 24 hours, according to data from TradingView and Coinbase.
Data from blockchain data firm Glassnode shows that with bitcoin’s little movement, short-term holders are bearing most of the pain, which creates increased sell-side pressure.
The realized price, a metric that values each bitcoin at the time when it was last spent on the blockchain, of bitcoin’s short-term holders was trading at roughly $51,400, according to Glassnode, vs. $24,400 and $17,700 for the overall market and long-term holders, respectively.
Bitcoin’s short-term holders “on aggregate [are] underwater on their investment, and are the most likely to create sell-side resistance,” Glassnode wrote in its newsletter on Monday.
Ether, meanwhile, recovered some losses yesterday, moving above $3,800 at the time of writing, according to data from TradingView and Coinbase.
A few other layer 1 tokens also gained on Tuesday: Tokens of smart contract platforms such as Internet Computer, Cosmos and Celo were among some of the biggest winners of the day, based on data from Messari.
The lack of correlation of alternative cryptocurrencies (altcoins) with bitcoin’s price may also put further pressure on bitcoin’s price, according to an analyst.
“The bull case remains for bitcoin, but it will be a much harder year as many traders will also focus on altcoins,” Edward Moya, senior market analyst at Oanda, the Americas, wrote in his daily market update on Tuesday.
Bitcoin was declining toward the $44,000-$45,000 support zone at the time of writing and is roughly flat over the past 24 hours. Indicators suggest a possible price bounce, albeit limited toward the $55,000 resistance level.
BTC has been stuck in a monthlong trading range after a near 20% crash in early December discouraged some buyers. Since then, the relative strength index (RSI) signaled a few oversold readings, although price gains have been muted compared with prior signals.
Katie Stockton, managing partner at Fairlead Strategies, a technical research firm, also noticed counter-trend signals which typically precede a price bounce.
A daily price close above $46,334 (at 8 p.m. ET) would confirm a positive signal, which would increase the possibility of a rise toward $55,644, according to Stockton.
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Today’s crypto explainer:
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