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The whole asset class that is crypto remains immobilised as global liquidity continues to be tight and investors wait on the sidelines.
With a new conflict having broken out in the Middle East, and generally negative sentiment prevailing in markets globally, the tiny asset class of crypto appears completely unable to catch a bid.
Bitcoin down once more
Wednesday has begun with a continuation of the slump over the last three days. Bitcoin is down 1.3% this morning. Add this to the previous couple of days of losses and this amounts to 3.2%, or around $900.
Bitcoin could bounce from here where it has just touched the 0.618 Fibonacci level. There is also the bottom of the upward channel it has been following since last year, which is situated at around $26,000.
However, rejecting once more from the 200-week moving average has certainly put a dent in bitcoin’s ambitions to head back to the top of the channel once again.
DXY ready for a bounce?
In traditional markets the Dollar Index (DXY) looks as though it might be about to bounce from the 105.6 support level, after retracing from the local high of 107.3 last week, perhaps signalling another period of flight into the dollar due to heightened geopolitical tensions.
Be that as it may, global markets haven’t seemed too concerned about the recent Middle Eastern conflict. The S&P 500 and the Nasdaq closed up 0.5% and the Hang Seng Index rose 1.3% overnight.
Ethereum holding strong
Back to crypto, ethereum, the second biggest cryptocurrency by market cap, is being bought up as it hits the convergence of two trendlines. The first, the very strong upward trend that began in June of 2022, and the second, the much shorter downward trend from mid-July of this year.
Breaking the big trendline from last year would be a very serious event indeed for $ETH and would mean an extremely bearish breakdown of its 16-month ascending triangle, a chart pattern that is usually very bullish.
As it stands, the last line in the sand for $ETH is holding, and the layer 1 blockchain network is doing better than $BTC, at least so far today, with a negative 0.7%, compared to BTC’s negative 1.3%.
Solana still bullish
Solana, another layer 1 competitor to ethereum, is holding up even better. Down only 0.2 so far today. The price is still within a bull flag and also holding nicely on strong support between $21 to $22.
With many cryptocurrencies looking to be in a good position for a bounce, it will be interesting to see if global markets will react positively enough for this to happen.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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