February 7, 2022

$BTC 24 Hour High $42,526  / Low $41,386   |   $BTC +1.5% Past 24 hours; +11.2% Past 7 days

$BTC attempts to break downward trend. Is a recovery imminent?

Good morning. $BTC managed to hold its gains at $42K over the weekend, following an aggressive price movement on Friday. As the price bounced back up to $41K on Saturday, USD100 million worth of $BTC short position was liquidated. After consolidating, expect $BTC to face some resistance before reaching $43.3K. But, bear in mind that the real upside hurdle is around $44,500. Only if the No.1 digital asset posts a high at this level would it break the downward trend that we have seen since November 2021.

The short-term bearish argument is that this pullover is not over yet, and we likely see calls for prices to retrace to $30K for one more time. While we shouldn’t discount this possibility, this is rather unlikely if we break towards $44,500. The correlation to equity markets dropped to around 0.8, which is still fairly high – a good 10-15% points lower than last week. Funding rates remain stretched among shorts, paving the way for sudden aggressive spikes higher as bulls look to create a liquidation event.

$ETH is consolidating around the 50W MA, with a downward-trending resistance line in place since November, also keeping a lid on further price appreciation for now. The desk view becomes decidedly bullish once we move above $3,400. If $BTC continues to gain strength, $ETH can possibly move up to $3,220 before a trend reversal takes place. The 50D MA is also crossing this short-term upside target. Yet, a price breakdown would send $ETH to revisit $2,820, followed by $2,600 and $2,400. Its correlation to equity markets is around 10% higher than $BTC’s, so keep an eye on that as the week kicks off. The current market structure is in good shape – as long as the trading volume returns to the markets, we expect to see our fortunes turn to the upside in the next few weeks.

Learn more from today’s Trader View video.

Digital assets market:

  • Total crypto market capitalization stands at $1.8T, -1.0% from yesterday
  • Stablecoins market dominance: USDT 44.22%; USDC 28.94%; BUSD 9.36%; TerraUSD 6.41%; DAI 5.29%

Alts and DeFi watch:

  • $SOL -0.8% in the last 24 hours, -22.4% in the past week 
  • $SHIB +27.5% in the last 24 hours, +38.4% in the past week
  • $SAND 0% in the last 24 hours, +19.6%% in the past week
  • $ENJ +2.2% in the last 24 hours, +15.6% in the past week

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