By Bitcoin and other cryptocurrencies have experienced little change on Friday, as they continue to grapple with the aftermath of a significant selloff that wiped out most of the gains from the latest crypto rally. However, there are signs that the tokens may be stabilizing, with the worst of the declines potentially behind us.
Over the past 24 hours, the price of Bitcoin has remained relatively flat at $26,750. This comes after the digital currency started the week near $28,000 but faced a selloff that pushed it to its lowest levels of the month. Now back in the $26,000 zone, Bitcoin finds itself in a familiar region that had been dominant for over a month prior to a rally in late September. During this period, Bitcoin experienced historically low volatility and trading volumes.
One key factor in Bitcoin’s recent decline, according to Yuya Hasegawa, an analyst at crypto exchange Bitbank, was its failure to break through a crucial technical resistance. Specifically, Bitcoin was unable to surpass its 200-day moving average at the start of the week, leading to dips below $27,000. Some market observers have also attributed this week’s decline to geopolitical tensions surrounding the Hamas-Israel confrontation.
Overall, while cryptocurrencies face ongoing pressure, there are cautious hopes that they may be finding stability in the face of recent challenges. The coming days will reveal whether Bitcoin and its counterparts can regain their bullish momentum or if further declines are on the horizon.
Crypto Market Participants Exercise Caution Amidst Middle East Conflict
While the Dow Jones Industrial Average and S&P 500 have demonstrated resilience in the face of fresh conflict in the Middle East, participants in the crypto market are displaying a more cautious attitude. Analysts suggest that crypto traders have reduced their bullish bets due to concerns that an escalation of violence could cause a spike in oil prices. Such a scenario would reignite inflationary pressures, potentially compelling the Federal Reserve to maintain higher interest rates. This would pose a challenge for riskier assets like tokens.
Bitcoin’s Losses Could Indicate a Potential Turning Point
Bitcoin has experienced losses within this context, but there are indications that the worst may be over, at least for now. Taichi Hasegawa, a prominent analyst, explains that “the technical sentiment has deteriorated for Bitcoin.” He further adds, “The price has already retraced half of the rise since September, so the correction could be complete, and the price will likely consolidate around the level slightly below $27,000 in the near term.”
Other Tokens Demonstrate Varied Performance
In contrast to Bitcoin’s losses, Ether, the second-largest token, remains relatively stagnant at just below $1,550. Smaller cryptocurrencies or altcoins show more buoyancy, with both Cardano and Polygon exhibiting gains of less than 1%. The same trend can be observed among meme coins, as Dogecoin and Shiba Inu each advanced less than 1%.
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