Ethereum gains 13% in one week post Bitcoin’s hold above $20,000


Despite the relief rallies, crypto analytics firm Glassnode suggests current bear cycle for Bitcoin has been the worst so far.

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The downtrend of the crypto market has continued for more than three months now, and data from crypto analytics firm Glassnode suggests that the current bear cycle for Bitcoin has been the worst so far. Bitcoin (BTC) has lost 70% of its value against its November all time high (ATH) and is currently trading near $21,200, up by 6% over the past week.

Bitcoin looking for trend reversal

Though BTC has been surging ahead for more than a week now, it has failed to test major technical levels like the 200-day exponential moving average (trailing halfway below), and the 200-week simple moving average (SMA) which currently stands at $23,000. BTC has been facing declining trendline resistance since April and so far has failed to breach it. Also, BTC’s spot price is trading 16% below its realized price (average purchase price of all bitcoins in circulation), condensing to one fact that the BTC market is under a capitulation phase.

However, looking at on-chain data suggests an optimistic picture. Investors continue to carry long-term optimism for the crypto market leader and have been steadily accumulating to make it a part of their portfolio. The balance of Bitcoin on crypto exchanges has been at its lowest, indicating holding tendencies and preparations for the long haul. BTC has fallen below its 200-week MA but has never stayed below it for an extended period of time. The new psychological support is forming at $20,000. If bears continue to amp up  their selling pressure, BTC might retest the $17,000 lows.

It cannot be said with confidence that there has been a breakout as the market is yet to establish a clear trend. BTC will have to push through $23,000 and to $30,000 – its previous support to confirm a trend reversal.

Ethereum entangled in insolvencies

Ethereum (ETH), on the other hand, seems to be worse affected than BTC, given the current insolvency cases in the Defi market. ETH has been down by 75% from its November 2021 ATH, and was trading at $1,220, up by 13% in the last seven days.

The ETH/BTC pair was unable to breach the trendline resistance but is close to its 200-day SMA at 0.058 (ETH/BTC at 0.057). ETH/BTC drop of 22% since its May high, coincides with a steep decline in its TVL from $150 billion in November 2021 to $48.81 billion in June 2022.

The rising concerns regarding the performance of centralized Defi companies and DEXs could keep ETH underperforming against BTC in 2022. However, the ETH /BTC pair is above its 200-week SMA of 0.049 and has successfully tested support at the .236 retracement level of 0.053. ETH needs to break above the $1,300 to confirm a breakout. Any movement below it could once again trigger $1k support level.

The market is yet to signal a breakout or trend reversal. For the time being, investors are advised to be cautiously optimistic and continue to dollar cost average (DCA) into relatively less risky crypto assets like BTC if there’s cash ready for deployment.

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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.


Read More: Ethereum gains 13% in one week post Bitcoin’s hold above $20,000

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