Yesterday, Bitcoin and Ethereum attempted a breakout upwards, but the bears promptly absorbed the movement and pushed back the price of the two cryptos. At the moment, the market seems to be in a phase of stagnation, unable to react to positive stimuli and trapped within a dangerously bearish chart pattern.
What to expect now? Let’s delve into the situation in this article.
Summary
Bitcoin risks testing $92,000 if it doesn’t react now, Ethereum loses power
The price of Bitcoin seems trapped for several weeks now within a large range between 95,000 and 105,000 dollars, but soon this structure could resolve with a bearish plunge. Yesterday the orange cryptocurrency attempted to trigger a mini rally above 97,000 dollars, but the bear immediately reacted at the 99-period moving average on the hourly time frame. This is yet another hard blow struck against Bitcoin, which marks a disappointing performance of -9% in the last 30 days.
Now analysts are wondering if the asset’s inability to find a new bullish driver will turn into a bearish catalyst. On the daily chart, Bitcoin presents a technical structure on the edge, with fast moving averages crossing downward forming a “Death Cross” spiral. Usually, these price patterns end up breaking with a leg down, marking the beginning of a more or less prolonged downtrend phase. If Bitcoin does not hold the current support of 95,000 dollars, it could easily catapult to 92,000 dollars, where there is another solid area of buyers
According to the trader “FireCharts”, the cryptocurrency clearly shows an interest in fishing for new liquidity at lower price levels. Observing the BTC-USD chart on Binance, we notice that below $95,000 there is a clear line of supply interest, highlighted by a reduction in buy orders on the order book. In particular, it seems that only retail investors remained in the market during the weekend, while the whales have shown disinterest.
In the meantime, according to the derivative data from Coinglass, Bitcoin does not show signs of recovery, with open interest in a descending phase and the funding rate remaining flat below 0.01%. Regarding the options market, on Deribit Metrics, we notice a strong “put” component for the February 28 expiration, with bears targeting price areas between 70,000 and 90,000 dollars. At the same time, however, for the March 5 expiration, the situation seems more skewed in favor of “call” contracts.
Ethereum attempts a restart in the wake of the sudden gas increase, but is immediately rejected
Not only Bitcoin, Ethereum also attempted a breakout yesterday, without however managing to bring its price above critical levels for the bears. For just a few minutes, the second cryptocurrency in the market managed to reach the threshold of $2,850, marking an intraday gain of 7% which, however, evaporated in the following hours. In the end, ether closed the day at $2,740, with traders following the movement with a follow-down of the offer.
Analyzing the Ethereum network data, we notice that yesterday’s bull stimulus occurred alongside the increase in the gas (gwei) price. It seems that a semi-unknown memecoin project, known as Wall Street Pepe, attracted significant activity on the blockchain. In a few minutes, the commission fees skyrocketed from 0.70 to 70 dollars, accompanying the cryptocurrency rally. However, the gains quickly vanished when the fees returned to normal levels, promptly dampening the investors’ optimism.
More closely, we can observe how the hype phase occurred between 14:00 and 16:00 UTC time zone, while the claim of the presale of the aforementioned shitcoin was underway.
A single address contributed to creating congestion on Ethereum with about 190 ETH of gas spent, equivalent to 520,000 dollars. Usually, network activity peaks are associated with bull price movements, as this implies strong market interest and an increase in demand. This can result from a wave of new investors, increased use of DeFi applications, an NFT boom, or significant market events.
The future of Ethereum’s price between Pectra update, ETF, and on-chain data
Apparently, by observing the on-chain data, we notice how the brief euphoria of yesterday in the Ethereum ecosystem has quickly faded. Futures contract premiums were traded at 6%, maintaining a balance within the canonical 5-10% level, without any particular positive influence. At the same time, however, the open interest of the crypto in derivative markets has increased more compared to the benchmark Bitcoin, potentially marking a moment of shifting interest between the two assets.
In the coming months, the price of Ethereum could be influenced by several factors.
One of these will certainly be the long-awaited Pectra update, which is expected to double the blob capacity for rollups, allowing for cheaper and faster layer-2 transactions. Additionally, the proposed changes include the introduction of “gasless” transactions, which can be sponsored by third parties. This should technically improve Ethereum’s scalability, increasing the perception of the technology’s intrinsic value in the eyes of investors.
Another factor that will be crucial for the short-term success of Ethereum’s price is represented by Wall Street ETFs. The SEC is currently under pressure to approve exchange-traded funds in ether with the staking feature, which will allow investors to earn a yield on their position. Recently, the Cboe BZX Exchange submitted a request to the U.S. regulatory body to modify the 21Shares Core Ethereum ETF, in order to include this new functionality.
If approved, staking ETFs could provide that thrill missing from Ethereum’s price action, creating a new pretext for increased demand in the market.
