Cryptocurrency markets face pressure amid lingering uncertainty

XTB Analysis Team XTB Poland

At the start of the week, the cryptocurrency market reflects predominantly bearish sentiments, marked by moderate declines across several currencies. Bitcoin has undergone a correction of several percentage points since Friday, when bullish activity drove its price to levels around $38,500 as Ethereum retreated from its $2150 peak, which approached yearly highs. These declines coincide with short-term investors, holding BTC for less than 155 days, enjoying nearly 15 percent average gains, historically foreshadowing heightened short-term selling pressure and preceding corrections, as suggested by Glassnode's analysis. Interestingly, J.P. Morgan, in its analysis of the prevailing market conditions, highlights the positive implications of Binance's settlement with the US Department of Justice, viewing it as advantageous for both the exchange and the overall crypto market as the investigation into the leading cryptocurrency platform did not unveil concerns regarding liquidity or user funds, diminishing the likelihood of a 'second FTX' scenario in the eyes of the market. Additionally, recent on-chain data indicates a slightly elevated selling activity by long-term investors with the critical trading range between $35,300 and $36,000 being deemed pivotal for Bitcoin's momentum as December has traditionally proven successful for Bitcoin, yielding an average return of 12%, potentially hinting at prices approaching new highs by the month's end. In any case, the situation remains uncertain and any major news event could have significant repercussions on the price of not only Bitcoin, but the entire cryptocurrency market.

Warm weather spells trouble for Natural Gas

US natural gas prices experienced a noticeable decline with NATGAS trading nearly 4% lower at the start of the week. This downturn can be attributed to the prevailing forecasts indicating a shift towards warmer weather in the United States in the coming days as the expectation of milder temperatures has cast a shadow on natural gas prices as it suggests a potential decrease in demand, particularly at the start of the heating season. Projections for the next 8-14 days consistently point towards above-average temperatures spanning a more extensive geographic scope across the United States and this prediction of higher-than-average temperatures intensifies the downward pressure on natural gas prices. Looking at the technical situation shows the persistence of a bearish trend since the end of October 2023. This further reflects the delicate balance between weather forecasts, demand dynamics, and market trends, emphasizing the sensitivity of natural gas prices to external factors. While this appears to be the current situation, a sudden shift towards a colder climate prediction could bring a significant rebound of prices in the near term.

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XTB Analysis Team

XTB Poland

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