The cryptocurrency sector is going through a moment of reflection as the new week of February begins, with another down day in line with the red close of the first week of the month. This broke the string of four consecutive upward weeks for Bitcoin and Ethereum value, an event that has not occurred in more than 16 months.
Market participants are concerned because of positive labor market data in the United States, with a 517,000 increase in non-farm payroll employment in January. Today investors are awaiting Fed Chairman Jerome Powell’s speech at the Economic Club of Washington. His words will be carefully evaluated because if there is a significant market reaction, it could imply that the Fed itself is relaxed about the situation and could lead to future interest rate cuts.
Weakness in the sector began last Thursday, with Bitcoin beginning to reverse after reaching $24,240 for the first time since August 2021. Ethereum has maintained more stability, better absorbing the bearish impact.
The cryptocurrency market continues to demonstrate its resilience and ability to adapt to change, even at a time when the two largest digital currencies, Bitcoin and Ethereum value, are going through a period of reflection. This has been demonstrated by the growth in the overall capitalization of the sector, which has increased by $11 billion in the past seven days, thanks to the excellent performance of some second-tier tokens. In particular, tokens used for artificial intelligence-based projects.
Two of the best weekly performances came from tokens linked to platforms offering artificial intelligence (AI) services such as SingularityNET (AGIX) and Fetch.ai (FET).
AGIX rose 220% in 7 days, reaching $0.60 for the first time and a capitalization of over $670 million.
FET performed 110% and entered the Top 100 with a capitalization of $445 million.
Interest in artificial intelligence projects is growing and this trend is expected to continue to accelerate. The SingularityNET platform aims to build a decentralized, open network for artificial learning, while Fetch.ai focuses on building a decentralized, permissionless artificial intelligence network. These projects are powered by blockchain technology that enables transparency and security in data management.
The weakness accumulated in recent days does not scare traders. In fact, sentiment remains in the ‘Greed’ zone supporting purchases that remain tonic despite selling that pushed prices back to revisit $22,600 yesterday, Monday, 6 February, for the first time since late January.
BTC’s technical structure is aligned with the hypothesis that points to the close of the monthly cycle sometime between the end of this and the beginning of next week.
It is necessary not to go back below $20,800 in the coming days. While a consolidation above $21,500 would demonstrate a movement that began in January that is well structured and has a solid foundation.
Ethereum’s price trend remains caged within the trading range between $1,500 and $1,650 that has been bouncing prices for about 3 weeks.
General downtrend in recent days has not affected the performance achieved since the beginning of the year.
The cyclical structure of ETH seems to have a different setup from BTC.
Current monthly cycle seems to have reached the halfway point. This means that the next few days of the week should show relative strength and keep prices above $1,550 until Sunday’s close.