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First Mover Asia: Bearish Crypto Sentiment Continues As Dollar Strengthens

First Mover Asia: Bearish Crypto Sentiment Continues As Dollar Strengthens

By Muyao Shen, Damanick Dantes

Bitcoin was up slightly, but ether and most other major altcoins fell as investors continued to digest the Federal Reserve’s hawkish comments on Wednesday.

Market moves: Bitcoin extends drop before rising slightly; Crypto Twitter was dominated by the DeFi Wonderland drama.

Technician’s take: BTC’s upside remains limited given the intermediate-term downtrend.

Prices

Bitcoin (BTC): $36,948 +0.2%

Ether (ETH): $2,407 -2.6%

Top Gainers

Asset Ticker Returns Sector
Polygon MATIC +0.9% Smart Contract Platform
Algorand ALGO +0.6% Smart Contract Platform
Ethereum Classic ETC +0.1% Smart Contract Platform

Top Losers

Asset Ticker Returns Sector
Cosmos ATOM −7.0% Smart Contract Platform
Internet Computer ICP −4.1% Computing
Solana SOL −3.8% Smart Contract Platform

Markets

S&P 500: 4,236 -0.5%

DJIA: 34,160 -.02%

Gold: $1,796 -1.3%

Market moves

Bitcoin extended its losses for much of Thursday, a day after hawkish comments from U.S. Federal Reserve Chairman Jerome Powell, as the stock market also fell with some traders betting that the central bank will raise interest rates more than four times this year.

At the time of publication, the largest cryptocurrency by market capitalization was changing hands near $37,000, up slightly over the past 24 hours but still well off its high of a week ago, according to CoinDesk data. Ether, the second biggest cryptocurrency by market capitalization, was down over the same time period and was trading at about $2,400. Most other major altcoins were also in the red.

A strengthening dollar is usually bearish for bitcoin, as CoinDesk has reported before. Bitcoin and the dollar index in the past have moved in opposite directions. Such inverse correlation became more noticeable last July.

Data compiled by CoinDesk shows that bitcoin’s trading volume across major crypto exchanges was down from a day ago to its lowest level this week so far.

Source: CoinDesk/CryptoCompare

Instead of bitcoin, at the center of the market and crypto Twitter was the surprising drama around Wonderland, a popular decentralized finance (DeFi) protocol.

At the time of publication, the price of wonderland (TIME) was down by more than 25% to $396, according to data from CoinGecko. Prices of cryptocurrencies such as SPELL that are also part of “Frog Nation” were also down significantly.

Technician’s take

Bitcoin Stuck Below $40K Resistance; Support at $33K


Bitcoin’s four-hour price chart shows resistance levels (Damanick Dantes/CoinDesk, TradingView)

Bitcoin has failed to sustain a brief price rise from $32,900 to $39,000 over the past few days. The cryptocurrency is trading in a tight range on intraday charts, and technical indicators are mostly neutral over the short term.

Price action has remained below a downward-sloping 100-day moving average on the four-hour chart over the past few weeks, which indicates strong selling pressure. So far, oversold signals have preceded brief price rises, suggesting limited upside ahead given the persistent downtrend since November.

For now, buyers will need to hold support at between $30,000 and $37,000 in order to stabilize the pullback.

 

Editor’s Note:

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Original Source: https://www.coindesk.com/markets/2022/01/27/first-mover-asia-bearish-crypto-sentiment-continues-as-dollar-strengthens/