Crypto Markets Analysis: Prices Trade Quietly Despite Surrounding Noise

Crypto price movement was relatively mild this week.

Despite the soap opera surrounding Sam Bankman-Fried’s arrest, extradition and incredible shrinking $250 million bond, crypto assets appear to be ignoring the noise and trading on the basis of fundamentals, sentiment and basic supply and demand.

This is welcome news for markets in that focus can now shift to factors that are more connected to valuations. One factor that stands out is the decline in trading volume, understandable given the time of year. Crypto traders can be forgiven for a break after an exhausting and painful year.

The weekly chart for bitcoin (BTC) shows an approximate 50% decline in trading volume on Binance, along with a 17% decline in trading volume for ether.

Bitcoin’s seven-day performance versus the U.S. dollar was middle of the pack (ninth) this week relative to the top 20 cryptocurrencies by market capitalization.

By contrast, BTC finished third in the prior week. Its absolute performance was stronger, however, gaining 1.4% versus a 0.9% decline last week.

Ether’s 4.7% increase was a mirror opposite of last week’s 4.6% decline. ETH landed third on the performance list. BNB led the way with a 6.4% gain.

There was a much narrower dispersion of performance this week, with winners and losers ranging from 6.4% to -3.1%, compared to 30.6% to -15.4% the week prior.

Bitcoin and ether remain range-bound

Our thoughts on bitcoin’s chart are relatively unchanged from our thoughts a week ago.

Momentum is fairly stagnant, with BTC's Relative Strength Index (RSI) reading remaining in fairly neutral territory.

Past trading activity shows significant price agreement between $16,500 and $17,000. When agreement exists to this extent, prices can remain at that level for an extended period of time. This is compounded by the decline in volume that is emblematic of year end trading.

Bitcoin is currently trading fairly tightly to its 20-day moving average, and appears poised to remain there for the time being.

Ether’s chart implies an almost identical situation, which is unsurprising given its persistently tight correlation with bitcoin.

Coindesk Market Index sector performance

CDI Select sector performance shows the Currency (CCYS) and Smart Contract Platform (SCPX) sectors leading the way on both a weekly and monthly basis.

With BTC and ETH composing 62% and 58% of the CoinDesk Currency sector and Smart Contract Platform sector, respectively, the outperformance is strongly tied to the performance of the individual assets. Other notable assets within the CCYS and SCPX include:

CCYS:

SCPX: