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Bitcoin aims to break out of a corrective rebound
By FxPro
Market Overview
The crypto market capitalisation has shown a slight increase to $3.26T over the past 24 hours, as it paused its growth, releasing steam after rallying to a total capitalisation of $3.30T. The recovery to a two-month high still keeps the market within a typical corrective rebound of 61.8% of the initial downward momentum. Although it would be too hasty to ignore the sequence of rising local lows, it is still worth being prepared for the recovery momentum to lose steam.
Bitcoin rose to $98K on Wednesday, gaining for the third day during the US session, while Asian and European trading saw a correction and lull, respectively. The price of BTC touched the 61.8% level of the decline from the peak of $126K to the November lows of $80K. Further growth from these levels, especially exceeding $100K, will be an important signal that the decline in October and November may have been a deep correction, but did not break the bull market.
The relatively small Dash coin is experiencing an impressive rally, gaining over 130% since the beginning of the week. Technically, buyers pushed off the 200-day moving average, which had been providing support since September. The last comparable rise in scale was in early November, after which the price fell even lower over the next month and a half. It seems that the main reason for the growth is insufficient liquidity and the pump & dump approach, rather than the start of the alt season.
News Background
The revival of institutional demand signals that investors are actively reallocating capital after a period of caution and risk reduction at the end of last year, according to LVRG Research.
For the first time since mid-2022, the 52-week correlation between Bitcoin and gold has fallen to zero. Historically, the decoupling of these assets has preceded rallies in the first cryptocurrency.
According to Validator Queue, the number of coins locked in Ethereum staking has reached a new all-time high. There are 35.8 million ETH in the Beacon Chain network, which is 29.57% of the market supply of the second-largest cryptocurrency by capitalisation.
Liquidity in cryptocurrencies ceased to be distributed evenly last year, mainly concentrating in Bitcoin, Ethereum and a few other major coins, Wintermute notes. The situation arose against the backdrop of large institutional players actively entering the market.