Market Overview
The crypto market experienced a modest gain of 0.75% over the past 24 hours, bringing the total market capitalization to approximately $3.13 trillion. This uptick comes as part of a broader effort by the crypto sector to rebound, particularly following revivals in the U.S. financial markets during Monday’s trading session. Furthermore, Japanese stocks displayed encouraging growth on Tuesday morning, which fueled a renewed risk appetite among investors, making its way into the often volatile realm of cryptocurrencies.
Bitcoin is once again a focal point in this bullish scenario, recently exceeding the $92,000 mark. After fluctuating significantly on Monday, Bitcoin’s price re-approached levels seen a week prior. The excitement had traders eager, leading to a spike in sales when prices climbed above $92,000. Nevertheless, the prevailing sentiment remains cautious; market analysts suggest it’s premature to declare a sustained risk appetite while prices linger below the previous local highs, specifically around the $95,000 threshold. An optimistic angle highlights a steady pattern of rising local lows since November, suggesting potential for an upward trajectory.
Ethereum is also showing signs of resilience, maintaining a price point above $3,000. This level, having formed a solid bottom over the past five days, mirrors previous support levels near $2,920 at month’s end. Both Bitcoin and Ethereum are trading above the 50-day moving average, yet both are still attempting to breach their recent positional peaks, particularly the high recorded on January 6.
News Background
Amid this backdrop, retail investors appear to be cautiously liquidating loss-making assets, spurred by prevailing fears of volatility that increase selling pressure, as reported by CryptoQuant. Mixed sentiments in the market are echoed by profit-taking behaviors, suggesting that many investors anticipate a delayed bullish trend rather than an immediate rally. Analysts at QCP Capital have pointed out that optimism about a breakout in the first quarter is dissipating.
Interest in cryptocurrency media is also waning, as evidenced by a notable drop in YouTube views pertaining to crypto content, hitting the lowest levels since 2021 according to ITC Crypto. This decline is mirrored by reduced social engagement on platforms like X (formerly Twitter), indicating a potential dip in public enthusiasm toward cryptocurrency investments.
In more promising news, Arkham Intelligence has highlighted BitMine, a Digital Asset Trust company, which has recently boosted its holdings on the Ethereum network to an impressive 1.08 million coins, pushing the value of its portfolio to over $3 billion. This resurgence in locked assets hints at a growing confidence in Ethereum’s long-term viability.
Despite discussions surrounding Ethereum’s potential decline, Michael van de Poppe, founder of MN Trading, argues that the theory of its ‘demise’ is far-fetched. He believes the rate has reached its nadir, bolstered by increasing volumes of stablecoins being locked within the Ethereum framework.
Adding to the development narrative, South Korea has recently lifted its ban on corporate investment in cryptocurrencies. Legal entities can now allocate up to 5% of their share capital into top 20 cryptocurrencies by market capitalization, excluding stablecoins. This regulatory shift could pave the way for significant institutional investments in the near future.
The FxPro Analyst Team
