What is the latest situation in Bitcoin, Ethereum and Altcoins?
As we noted in our recent crypto market reviews, the market positivity we've seen in recent weeks has been nothing more than a correction to the prolonged downtrend the market entered in December, and Bitcoin's price performance confirms this hypothesis.
Bitcoin Breaks Important Support
The rising wedge on Bitcoin is a common pattern that acts as a "cool-off" pattern in front of the massive volatility spike. Sometimes assets break up and enter long-term rallies, leaving the downtrend behind.
Bitcoin tests the upper limit of the consolidation range. However, due to the lack of market entry and sluggish trading volume, the short-term rallies quickly subsided.
With at least two support levels broken, BTC is now looking for another ground to stand on. Unfortunately, the only significant level of support we see on the chart right now is located at the $19,000 level.
As the market was mostly surprised by such a strong increase in Bitcoin's volatility, liquidation volume reached a local peak of around $650 million in the last 24 hours.
Macro Print on Bitcoin and Crypto
One of the main root causes behind the recent decline in BTC is the US dollar rally, which is reflected in the DXY index, which measures the performance of the USD against a foreign currency.
After reaching the 50-day moving average, the US dollar successfully broke out of the support level and is now heading towards the local top of 108.7. The continuation of the US dollar rally will mean further pressure on risk assets, including cryptocurrencies and technology stocks.
Despite falling inflation, the market is pricing in cycles of rate hikes throughout the year. Finance experts forecast a 75 basis point increase at the upcoming FOMC meeting.
Latest Situation in Altcoins
In addition to the performance of the largest cryptocurrency in the market, alternative digital assets have faced several technical issues that fueled the latest rally.
As we mentioned earlier, Cardano's return to the market was due to technical problems that arose in testnest, where the new version of the node was installed. The error can damage the Vasil hard fork, which is the last thing the network needs.
Ethereum has also been targeted by bears, losing more than 7.3% of its value in the last 24 hours, which is the market average at this point.
Most altcoins have reached local support levels, which means we may see a slight bounce over the weekend due to the low trading volume in the crypto market and the inactivity of large institutional investors.
At the time of writing, Bitcoin is changing hands at $21,505, with Ethereum consolidating at $1,700 at a 50-day EMA.