Crypto Craze Cools Down: Bitcoin and Ethereum Take a Tumble as Market Rally Retreats

Bitcoin Plunges Over 15% in a Week as Transaction Volume Declines and MVRV Ratio Rises, Experts Warn of Potential Price Instability

Bitcoin, the world’s largest cryptocurrency, has experienced a significant drop in price, falling by over 15% in the past week. It is currently trading at $36,656.75, reversing the gains it had made recently. Analysis from Santiment suggests that the drop in transaction volume and the increase in the Market Value to Realized Value (MVRV) ratio may have contributed to the overvaluation of Bitcoin. While technical indicators such as the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) indicate a bearish momentum, the Chaikin Money Flow (CMF) remains above zero, providing some optimism.

In a similar vein, Ethereum, the second-largest cryptocurrency, initially surged above $2,000 but has since retreated to $1,959.51, reflecting a drop of more than 4% in the past seven days. Despite signs of continued interest in Ethereum’s futures markets, including a positive funding rate and Taker Buy Sell Ratio, the Korean investment sentiment has been low, as indicated by the Korea Premium Index.

The losses seen in the broader cryptocurrency market are also reflected in meme cryptocurrencies. Dogecoin (DOGE) and Shiba Inu (SHIB) have experienced a decline in value, with their prices falling by up to 7%. This further emphasizes the current market trend.

The overall sentiment in the cryptocurrency market is currently deemed as ‘greedy,’ according to the Fear and Greed Index, which stands at 69. However, trading volumes have dropped by 40%, and key technical indicators are signaling bearishness, indicating a likelihood of continued slow movement in the near term. Additionally, major wallets have reportedly shed over 50k BTC post-rally, contributing to the decline in transaction volume.

As investors and traders navigate this volatile landscape, they will closely monitor these metrics and analyses to gauge future movements within the cryptocurrency market. It is essential to stay informed and exercise caution in such a rapidly changing environment.

Martin Reid

Martin Reid

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