Today was not the best day for Bitcoin and Ethereum traders. General Market ~Virtual Currency/Securities~Closed in red Meanwhile, investors were cautiously awaiting hints about what the US Federal Reserve will decide at its next FOMC meeting.
Tomorrow, the US will release new numbers on unemployment claims and January home sales, two metrics that could have a big impact on the Fed’s future interest rate decisions. In general, stocks and digital assets tend to grow when the Fed lowers interest rates. And neither the crypto market nor the stock market likes the uncertainty of not knowing what the FOMC will do next.
The Dow Jones Index fell 0.17% to close at 38,563.80 points. The S&P 500 fell by 0.60% to 4,975.51 points. And the Nasdaq showed further decline, ending the day at 15,630.78 points, down 0.92%.
And cryptocurrencies are imitating Wall Street. Bitcoin started the trading day at $52,272 and started trending downward until reaching a low of $50,611. The leading digital currency is currently trading at $51,162, marking a 2% decline over the past day. The decline represents what could be the steepest decline since January 22 unless there is a recovery.
Image: Tradingview
Despite today’s decline, overall sentiment towards Bitcoin has remained bullish throughout 2024.
The cryptocurrency managed to breach the $50,000 level, mainly driven by demand for the Bitcoin Spot ETF. However, it has remained flat since February 15, suggesting that the bullish momentum may cool down.
A key support level for Bitcoin is near $51,000, which correlates with the EMA 10, or 10-day exponential moving average. Notably, Bitcoin has not closed below this level since January 25th.
Currently, the RSI (Relative Strength Index) shows that Bitcoin is overbought and its value is approaching 70, which could cause investors to start selling BTC for profit. This suggests the possibility of a shift towards market equilibrium.
Ethereum’s response to market trends
Ethereum appears to be mirroring Bitcoin’s immediate market reaction.
The second-largest cryptocurrency by market capitalization faced rejection at the $3,000 level, a notable psychological barrier, and subsequently fell 3.2% to a daily low of $2,880. Following this, Ethereum slowly recovered to $2,900.
Image: Tradingview
In contrast to Bitcoin’s sideways movement, Ethereum has remained bullish throughout February, with a consistent upward trajectory.
This resiliency underscores Ethereum’s solid market sentiment, with fundamental factors driving high expectations among traders: upcoming network upgrades, sustained DeFi activity that is more than double what it was before. characterized by an increase. $45 billion There are even rumors that a Spot Ethereum ETF could be approved starting October 2023 and in the future.
Rather than facing immediate resistance, Ethereum is currently positioned closer to the $2,800 support level determined by the 10-day average price. If Ethereum manages the recovery and maintains its bullish trend, we expect the next major resistance level to be near his $3,500 level.
Edited by Stacey Elliott.
