The bearish turn comes at the mid-week turn after the price of crypto assets such as Bitcoin Ethereum and Dogecoin had registered the highest highs since early November.
The bull appeared to have started the Christmas rally when the economic tightening decisions of the US central banks on Wednesday, and the European central bank the next day, began to push down the global stock markets and by extension the crypto markets, confirming a vicious correlation that has been characterizing the course of prices for months.
As if that were not enough, there was also FUD created by the news that has been lurking for several days about Binance, the world’s leading exchange by daily trading volume.
A maelstrom of rumors circulated about the exchange’s solvency over an unconvincing report on proof of reserves and possible US regulatory problems.
Tensions that are also reflected in the price of BNB, the exchange’s native token, which manages to limit the damage by returning to near the $220 per token threshold, its lowest level since last July.
Trading on the BNB token registers the fourth highest volume spike since the beginning of the year, behind only the period of declines between May and June, during the Terra/Luna turmoil, and early November during the days that chronicled the end of the FTX exchange.
The middle week of December ends colored red. Double-digit losses for many of the Big names. In addition to Binance Coin (BNB) with the weekly drop over 11%, it is joined by Dogecoin (DOGE), Cardano (ADA), Polygon (MATIC) and Polkadot (DOT) with double-digit negative balances.
Despite the generalized decline and a reversal in volatility rising from last week’s lows, investors’ mood is not undermined. The Fear&Greed index, which measures crypto market emotions, remains in the upper range of early November and above late November levels.
Analysis of Bitcoin (BTC)
In less than 3 days, between Wednesday and Friday, the price of Bitcoin (BTC) loses more than 9% with prices returning to revisit late November levels.
With all the bullish work of the last few weeks gone, the next few days will need to see whether the downtrend has taken a break or traders are returning to accumulate positions to the upside.
It will be necessary to wait for the closing of the sub-cycle week between today and tomorrow, to identify a low that will have to be avoided in the following days.
Analysis of Ethereum (ETH)
The descent of Ethereum (ETH) was more painful, with last Friday’s lows returning to revisit late November levels and testing the last useful support before opening up space to fall back to check the mid-November lows in the $1,070 area.
Between Wednesday, 14, and Friday, 16 November, ETH prices went from the stars with the price at $1,350 for the first time since 8 November, to the purgatory of $1,155, for a total loss of 14%.
It will be necessary for Ethereum to wait the next 2-3 days to see if the weekend rebound will consolidate to recover the levels of early last week, or the bearish speculation has taken a breather before returning to deal another blow.
Source: https://en.cryptonomist.ch/2022/12/20/bitcoin-dogecoin-price-market-analysis/