Bitcoin and Ethereum set to deepen correction
Market picture
The crypto market has started the new week with a correction sentiment, reducing capitalisation by 3% to $1.54 trillion in the last 24 hours. As is often the case with intense moves, Bitcoin looks more stable than the market, losing only 1.8% to $41.1K. Ethereum is down 2.3% to $2160.
Bitcoin is once again testing the local support it managed to hold last week. But we are attracted by a sequence of lower local highs, indicating an impressive selling proposition. We may be seeing profit taking from all the upside from the October lows. Working off this scenario suggests a pullback to the $38K area if the market falls below $40K. But even this potentially nasty drawdown looks to be just part of a larger bull cycle that Bitcoin is now moving within.
Ethereum is developing a retreat from the upper boundary of the trading channel, currently testing the early April peak area. The scenario of a shallow correction suggests a decline of about $100 more to $2060, but we should be ready for $1700 as well.
News background
Morgan Creek Digital founder Anthony Pompliano believes that BTC continues to follow four-year market cycles fitting between halvings, and the next growth phase of the first cryptocurrency is now beginning.
The bitcoin-based NFT market will grow 100-fold in 2024, researchers at cryptocurrency exchange Bitget predict. The ORDI token, being the leading token of the Bitcoin ecosystem, is already capable of entering the top 30 in terms of market capitalisation during the next bull market. If the BTC ecosystem continues to expand, Bitcoin could reach $100K thanks to a surge in demand for the first cryptocurrency.
The US SEC is reviewing its approach to spot bitcoin ETFs following ‘court decisions’, the regulator’s head, Gary Gensler, commented. The agency is currently reviewing between eight and 12 such proposals, he said.
The SEC rejected a petition by exchange Coinbase to develop rules for the cryptocurrency industry. According to Gary Gensler, existing laws apply to the industry, and there is nothing that would indicate the need for new regulations.
Asset management companies Galaxy Digital and DWS Group, as well as Dutch market maker Flow Traders, are creating a subsidiary firm, AllUnity, which will issue a euro-denominated stablecoin.
One more Solana-based meme token, also featuring a dog, Bonk (BONK), rose 100% overnight after listing on Coinbase. Its capitalisation has already passed the $1.7 billion mark.
Author
Alexander Kuptsikevich, a senior market analyst at FxPro, has been with the company since its foundation. From time to time, he gives commentaries on radio and television. He publishes in major economic and socio-political media.
