Bitcoin and Ethereum are struggling to rebound
|Market overview
The crypto market capitalisation is up about 1% from yesterday's level, rebounding to $2.24 trillion after plunging to $2.18 trillion on Tuesday. Once again, we are seeing a weak rebound after the dip, underscoring that bears remain in control of the markets.
Bitcoin fell to $62.5K but had already rebounded to $65.5K at the time of writing. This looks like an attempt to form a double bottom. In the short term, it is worth acknowledging the local initiative on the bulls' side, but this rebound has not yet broken the downward resistance that has been in place for twenty days.
Ethereum is up 4%, outperforming many of its heavyweight competitors. Here, we also see an ongoing struggle at the long-term support level. In April last year, the second-largest coin by capitalisation was actively bought after falling below this line, but will it be able to do so again?
News background
In the current environment, cryptocurrencies are losing ground alongside tech stocks, Wintermute notes. Capital is flowing from high-risk assets into defensive and tangible assets.
Global uncertainty is pushing investors into defensive assets, depriving the crypto market of liquidity. The stagnation in stablecoin supply has become a ‘significant obstacle’ for Bitcoin, Matrixport notes. Glassnode expects liquidity to recover in six months at the earliest.
If Bitcoin breaks through $60K, it could fall to the $50K–55K range or even to $47K, Bitrue predicts. In a negative scenario, cascading liquidations will accelerate amid deteriorating external conditions.
Cryptoquant has recorded a slowdown in BTC sales on the largest exchange, Binance, which offers hope for a short-term recovery. However, in the medium term, the bearish trend may continue.
Bitcoin is in its ‘adolescent’ stage of development — an intermediate stage between a speculative asset and a global store of value, according to Bitwise. Strategy founder Michael Saylor believes Bitcoin's recovery could take two to seven years.
According to Onchain Lens, Ethereum co-founder Vitalik Buterin has sold 3,765 ETH worth $7.08 million over the past four days and 10,723 ETH since the beginning of February. The total proceeds amounted to approximately $21.7 million at an average price of $2,027 per coin.
The Arizona State Senate has approved the creation of a strategic reserve of digital assets. The fund is planned to be replenished with confiscated cryptocurrency.
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