Andriy Onufriyenko
The cryptocurrency market has lost $ 500 billion since bitcoin hit an all-time high last week, as investors capitalized on the recent rally that took it to $ 69,000.
Since then, Bitcoin has dropped 18%, having dropped close to $ 55,000 at one point on Friday. It's lost 13% in the past seven days alone, putting it on track for its biggest weekly drop in six months.
"If the downtrend continues, the 14-day Relative Strength Index will record an oversold reading for the first time since May, when BTC fell below $ 30,000," Will Morris, sales trader at based digital asset broker in the United Kingdom. GlobalBlock said.
In technical analysis, if the Relative Strength Index, which ranges from 0 to 100, falls to 30 or less, this would indicate that an asset has been oversold and should theoretically rebound.
the Index of greed and fear of the cryptocurrency market - an informal measure of investor sentiment - has fallen to its lowest level since early October and, at 34, indicates "fear," Morris said. A reading above 60 would indicate "greed."
"The amount of BTC and ETH on exchanges continues to fall to lower levels and whales continue to accumulate," Morris said in an emailed response.
The VanEck Bitcoin Strategy Exchange Traded Fund (XBTF) is the third largest publicly traded bitcoin futures ETF. On its market debut on Tuesday, the fund posted a trading volume worth $ 4.8 million, compared to the roughly $ 1 billion that the ProShares ETF earned on the day of its launch in late October, according to CoinDesk.
Also, the new trillion dollars US Infrastructure Bill, which became law on Monday, now requires crypto brokers to report any transactions above a certain level to tax authorities, but offered little clarity on what constitutes a "broker."
Ethereum's ether token has also lost around 18% since it hit a high of almost $ 4,9000 last Wednesday. Last time it traded around $ 4,162, it was down about 1.4% on the day and nearly 10% on the week, marking its biggest seven-day drop since early September.
With bitcoin under pressure, smaller altcoins have also lost value. Dogecoin is down 11% on the week, while shiba inu is down 15%, according to Coinmarketcap. The solana and cardano tokens are down around 9.5% as well.
"Many market participants are taking advantage of the situation and are rushing to stock up on top 10 cryptocurrencies in a drawdown, as indicated by various indicators," said Johnny Lyu, CEO of crypto exchange KuCoin.
"Therefore, it is too early to speak of a general transition of the market to a bear phase, as institutional investors are maintaining their positions in the cryptocurrency portfolio," he said.
