As occurred in recent days, it is Bitcoin to give a negative signal, a bearish signal that drags the rest of the market. The correlation between Bitcoin and the movements of gold continues to be curious.
Today more than 80% of cryptocurrencies are in negative territory with average declines of around 5%.
Contrary to what happened in the last few days, when the geopolitical news arrived, the easing of the tensions between the US and Iran sees Bitcoin retreat and return to Tuesday’s levels, with a decrease of 6% from the highs reached after the Iranian missiles launch. In these hours there is a bearish movement in line with the gold retracement rates.
From last night’s highs, Bitcoin lost 6%, while gold fell by 4.5%, confirming a high correlation in price trends, a condition that has rarely occurred more than once in recent years.
Staying in the cryptocurrency sphere, among the few positive signs of today emerges Lisk (LSK) which is the best performing asset of the day with an increase of 15%. Ethereum Classic (ETC) also does well and manages to rise by 2.5%. Waiting for the next hard fork scheduled for January 12th, the movement attracts ETC’ buyers.
Monero (XMR) also continues to do well, with a 2% increase. Monero, with today’s rise, turns out to be the best performance among the top 50 cryptocurrencies on a weekly basis, scoring a +25%.
The capitalization, after reaching yesterday’s highs above $210 billion, which had not been recorded since mid-November 2019, today falls just below that level. Despite today’s decline of Bitcoin, which goes beyond -5% at some points of the day, the dominance remains anchored at 69%. Ethereum’s dominance remains unchanged at 7.2%, as does Ripple’s at 5.2%.
For the umpteenth time in the last seven months, Bitcoin tests the first dynamic downward trendline without a positive outcome, which actually affects again the rise and rejects the Bitcoin prices under the $7,900 threshold in the last few hours, after having touched $8,500 yesterday.
It is a decline that at the moment does not affect the bullish structure which Bitcoin has outlined since the relative low of January 3rd in the $6,300 area, but it is necessary in the next few hours to return to support the rise above the $7,600-7,700 threshold. A return below this level would invalidate the ongoing bullish structure.
Ethereum (ETH) price
Even Ethereum in the last few hours, after having touched $148, the highest level since last December 10th, finds the prevalence of profit-taking that brings the prices to the $137 area. For Ethereum the technical structure is similar to that of Bitcoin, with the need to find a consolidation above $134 in the next few days to set a new extension that would be confirmed with prices over $150.
Ethereum would invalidate the current bullish structure, which started with the December period lows, if prices returned below $132-130. It is necessary for ETH to give a decisive second bullish signal after the first one arrived last Monday with the breaking of the dynamic bearish trendline that affected the trend for over six months.