Today hasn’t been the best day for Bitcoin and Ethereum traders. Markets in general—crypto and securities—closed in the red yesterday while investors cautiously waited for hints at what the U.S. Federal Reserve will decide at its next FOMC meeting.
Tomorrow the U.S. will release new data on unemployment claims and January home sales—two criteria that could weigh heavily on the Fed’s upcoming decisions on interest rates. Generally speaking, stocks and digital assets tend to thrive when the Fed lowers rates. And neither crypto nor securities markets like the uncertainty of not knowing what the FOMC will do next.
The Dow Jones index fell 0.17%, closing at 38,563.80 points; the S&P 500 fell 0.60%, registering 4,975.51 points; and the Nasdaq had a more expressive fall, closing the day at 15,630.78 points, for a decrease of 0.92%.
And crypto is mimicking Wall Street. Bitcoin commenced the trading day at $52,272, embarking on a downward trajectory that saw it touch a low of $50,611. The leading digital currency is currently trading at $51,162, representing a 2% decline over the past day. This downturn marks what could be the most significant decline since January 22, absent a recovery.
Image: Tradingview
Despite today’s drop, the overall sentiment for Bitcoin has been bullish throughout 2024.
The cryptocurrency managed to breach the $50,000 mark, largely driven by the demand for Bitcoin spot ETFs. However, it has been trading sideways since February 15, suggesting a potential cooling off of bullish momentum.
A critical support level for Bitcoin is identified around the $51,000 mark, correlating with the EMA 10, or 10-day exponential moving average. Notably, Bitcoin has not closed below this level since January 25.
Presently, the RSI (Relative Strength Index) indicates Bitcoin is overbought, with a value nearing 70, suggesting a potential shift towards market equilibrium as investors might begin selling BTC to realize profits.
Ethereum’s Response to Market Dynamics
Ethereum seems to be mirroring Bitcoin’s immediate market response.
The second-largest cryptocurrency by market capitalization faced rejection at the $3,000 mark, a notable psychological barrier, subsequently retracting by 3.2% to a daily nadir of $2,880. Following this, Ethereum managed a modest recovery to $2,900.
Image: Tradingview
Contrasting with Bitcoin’s sideways movement, Ethereum has maintained a bullish stance throughout February, consistently navigating within an upward trajectory.
This resilience underscores Ethereum’s robust market sentiment, marked by fundamental factors that have set high expectations among traders: an upcoming network upgrade, a sustained increase in DeFi activity that’s more than doubled to $45 billion since october 2023, and even rumors of a possible spot Ethereum ETF being approved in the future.
Ethereum is presently positioned closer to its support level at $2,800, determined by its 10-day average price, rather than facing immediate resistance. Should Ethereum manage a recovery and sustain its bullish trend, the next significant resistance is anticipated near the $3,500 mark.
Edited by Stacy Elliott.
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Source: https://decrypt.co/218360/bitcoin-ethereum-bullish-in-uncertain-waters
