Cryptocurrency Markets Under Pressure as Uncertainty Lingers: BTC and ETH Experience Corrections

Cryptocurrency markets face pressure amid lingering uncertainty

At the start of the week, the cryptocurrency market reflects predominantly bearish sentiments, marked by moderate declines across several currencies. Bitcoin has undergone a correction of several percentage points since Friday, when bullish activity drove its price to levels around $38,500 as Ethereum retreated from its $2150 peak, which approached yearly highs. These declines coincide with short-term investors, holding BTC for less than 155 days, enjoying nearly 15 percent average gains, historically foreshadowing heightened short-term selling pressure and preceding corrections, as suggested by Glassnode's analysis.

Interestingly, J.P. Morgan, in its analysis of the prevailing market conditions, highlights the positive implications of Binance's settlement with the US Department of Justice, viewing it as advantageous for both the exchange and the overall crypto market as the investigation into the leading cryptocurrency platform did not unveil concerns regarding liquidity or user funds, diminishing the likelihood of a 'second FTX' scenario in the eyes of the market.

Additionally, recent on-chain data indicates a slightly elevated selling activity by long-term investors with the critical trading range between $35,300 and $36,000 being deemed pivotal for Bitcoin's momentum as December has traditionally proven successful for Bitcoin, yielding an average return of 12%, potentially hinting at prices approaching new highs by the month's end. In any case, the situation remains uncertain and any major news event could have significant repercussions on the price of not only bitcoin, but the entire cryptocurrency market.

Walid Koudmani

Market Analyst working in UK-Italian-Arabic markets covering a broad range of assets including stocks, commodities, FX and crypto. English, Italian and Arabic Speaker with a B.A in Business Management. Quoted in many prestigious publications including the Guardian, Barrons and Lefigaro and winner of bloomberg top forecast rank Q-2/Q-3 2020.