Today we are seeing a drop in sentiment in the crypto market where only DYDX and Polygon (12% and 4% increases, respectively) actually stand out positively at the moment. Bitcoin is slipping around $36,000 and Ethereum is trading close to the psychological support level at $2,000. Mrkets await US inflation data which will be released at 1:30 PM GMT. - a potential upward surprise (consensus assumes 3.3%) could strengthen the dollar and weaken stock market and cryptocurrency sentiments. Implied by the options market, volatility on the S&P500 index after the CPI inflation reading from the US is around 0.3%. The market expects a 0.75% increase in a positive scenario (coinciding with or below forecasts) and a 0.5% decrease in the index if inflation surprises with an increase.
- Due to uncertainty about US inflation reading crypto traders are realizing profits as 'risk averse' scenario widens
- According to Glassnode data, when Bitcoin cost about $37,500 the average investor was trading at about 25% profit (the average purchase price was just under $30,000)
- The average purchase price of BTC on-chain of the so-called short-term investor (statistically the group most likely to sell and realize profits) is about $31,500 which implies an average profit of about 15% which historically indicated higher selling activity of speculators
- Positive news regarding the iShares Ethereum Trust and comments from Bloomberg analysts, who indicated that the SEC may eventually approve all Bitcojn ETF applications at the same time, no longer have a positive impact on the price of Bitcoin, potentially suggesting an overbought market and active supply.
Bitcoin chart (H4, H1 interval)
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Open account Try demo Download mobile app Download mobile appOn the H4 interval, we see that the price has reached the SMA50 average (orange line) - a drop below it may herald a test of the area around $35,000 where we see the 23.6 Fibonacci retracement of the upward wave from mid-October. The next important levels seem to be the levels of 38.2 abolition where the SMA200 will soon arrive, as well as 61.8 - the important level of $31,000, which, according to Glassnode data, also corresponds to the average price of a short-term BTC holder (with average Bitcoin age of 155 days), which historically proved to be on-chain levels often tested after waves of euphoria. Source: xStation5
On the hourly interval, we can see that the price is testing the SMA200 levels, which were tested twice during the October upward impulse and buyers managed to 'pull Bitcoin' above the average twice. Source: xStation5
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