Bitcoin has failed to break away from its long-term trend

Market overview

The crypto market trended lower at the end of Monday, mirroring the US equity market, as it fell from a peak of $2.23T to $2.16T before returning to recent local lows of $2.18T by Tuesday morning. This marks yet another test of the 50-day moving average (MA) as support, which sellers have been testing over the past couple of weeks. Among the top coins, losses ranged from -1.4% for Bitcoin Cash and -1.5% for BNB to -8.8% for Near and -8% for Basic Attention Token. 

Bitcoin closed higher on Monday despite significant afternoon selling pressure. On Tuesday, the sell-off ahead of the start of Asian trading showed that bears remain in control, driving the price down from $65K to $63K, with a slight rebound to $63.4K. Consequently, the leading cryptocurrency is failing to break above the 200-week moving average, which the market had traded above for the previous three weeks. This is typical behaviour following a dip below this important long-term moving average, as the market is saturated with negativity in the lead-up to this level. It will likely take a few more weeks of stability or positive momentum to draw the wider public into the market. 

News background

On-chain data does not confirm sustained growth. Analyst Darkfost attributes the current price stabilisation to sellers running out of steam, rather than a return of buyers. Aggregate demand in the spot and futures markets is insufficient to trigger a reversal.

Based on four-year cycles, Alphractal hopes the bear market bottom is already taking shape and will be confirmed within the next couple of months.

Bloomberg has calculated that at least 12 companies that had been buying cryptocurrencies for their reserves have shifted their focus to AI-related sectors in recent months. This change in strategy has not yet helped to restore investor interest in the shares of such DAT companies.

The BitMart cryptocurrency exchange has announced a phased closure after nine years of operation. The platform will cease all operations definitively on 31 January 2027. The company did not specify the exact reason for the closure, citing “operational conditions, the market environment and future strategic direction”.

BitMine purchased an additional 9,946 ETH last week, bringing the total amount of Ethereum in its reserves to 5.79 million ETH. BitMine’s reserves now exceed 4.8% of the total Ethereum supply. Due to the asset’s value decline, the company remains at a loss of more than $8 billion, having purchased ETH at an average price of around $3.4K.

By selling 5.4 million ordinary shares, Strategy increased its dollar reserves by $544.5 million over the past week, to $3.75 billion. According to Michael Saylor, this will be sufficient to cover dividends on preference shares for more than two years. Strategy has not purchased any Bitcoin for 5 weeks and holds 843,775 BTC in its reserves.  

Summary: The crypto market is testing support once again: sellers are pressuring Bitcoin and altcoins, while news reports point to weak demand and investor caution.