Following no clarity on the FTX fiasco and hawkish commentary from the central banks across the globe, the cryptocurrency market has remained weak in the last one week with total valuation slipping below $820 billion. As of Friday, the total market-cap was $813 billion as compared to $826 billion last week. Bitcoin and Ethereum, the largest digital tokens by market cap, are trading below their important levels, experts told Business Standard.
“Bitcoin experienced a dip after experiencing bullish momentum following the Federal Open Market Committee’s (FOMC) meeting last week, but it has since recovered and is currently trading above the $16,800 level. Since November, the price of Bitcoin has been fluctuating within the range of $16,500 to $17,000,” said Alankar Saxena, co-founder and CTO at crypto investment platform Mudrex.
“The main reason behind the market’s weakness is the commentary coming in from both the Fed and the ECB, with suggestions that inflation has become more ‘entrenched’ in the economy and would require sustained periods of higher interest rates to be dispelled. This is bearish for ‘risk-on’ assets in general, and global equities continued to sink during the week,” said Parth Chaturvedi, crypto ecosystem lead at crypto trading platform CoinSwitch.
“Bitcoin and Ethereum are trading below the important levels of $17,000 and $1,250, respectively,” Chaturvedi added.
On Friday, Bitcoin was trading at $16,861 and Ethereum was trading at $1,223, according to CoinMarketCap.
The narrative around FTX collapse has shifted with Sam Bankman-Fried agreeing to extradition. On Thursday, he was given bail in the US for $250 million.
What to expect next week?
“Further risks remain, with Ukraine’s worsening war situation being the biggest threat to commodity and energy supply chains. There has also been a surge in Covid cases in China, adding more uncertainties,” Chaturvedi said.
“To continue its upward trend, it is crucial for Bitcoin to hold its key level above the current level. However, if the price falls below $16,500, there may be a return of bearish sentiment to the market,” Saxena said.
“Ethereum is currently trading above the $1,200 level, with immediate resistance at the $1,250 level and support at the $1,150 level,” he added.
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