Over the past few weeks, both Bitcoin (BTC) and Ethereum (ETH) have gone through a series of price fluctuations before entering a period of stagnation. Bitcoin trading has significantly calmed down this week, resulting in a decrease in transaction volumes from 70% to 50% and a reduction in volatility. However, this stability may just be the calm before the storm.
What lies ahead for Bitcoin and Ethereum?
During market consolidation, many traders tend to accumulate long positions. Surprisingly, despite this trend, most traders have taken a bearish stance on BTC and ETH.
In the last 24 hours, the percentage of short positions taken against BTC has increased from 49% to 54%. Nevertheless, there is a potential silver lining on the horizon next week.
The introduction of spot ETFs for BTC and ETH in Hong Kong has the potential to attract institutional capital inflows from Asia. This could potentially reverse the current bearish trend surrounding these two cryptocurrencies and work in favor of BTC and ETH.
BTC and ETH exhibit a correlation
BTC, the flagship cryptocurrency, and ETH, the leader of the altcoin world, have shown a significant price correlation in recent weeks. Both cryptocurrencies have experienced corrections in the past few days, contributing to the prevailing bearish sentiment. Moreover, the trading speed of both BTC and ETH has recently decreased.
Simply put, the trading frequency of BTC and ETH has declined on the charts. Additionally, the MVRV ratio for both cryptocurrencies has risen, indicating that most addresses holding these coins are relatively profitable. Furthermore, the difference between long and short positions for these coins has increased, suggesting a rise in the number of long-term BTC holders.
As of now, Bitcoin is trading at $63,340, while Ethereum is priced at $3,136. It has been highlighted that the $3,200 level presents a critical resistance for Ethereum.
Disclaimer:
The information provided in this article should not be considered as investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry inherent risks. It is recommended for investors to conduct their own research before making any investment decisions.
