Bitcoin (BTC) is testing lower levels after failing to break the $ 60,000 resistance, and indications are that the withdrawal is far from over.
The BTC / USD pair returned from $ 55,000 Monday night, hours after hitting local highs of nearly $ 59,000 in early bullish trading.
With sellers still close all the time at $ 64,500, the largest cryptocurrency still has a lot of work to do to break out of the current broad trading area.
BTC is back on the stock exchanges
One indicator that may soon cause problems for bulls is the overall balance between BTCs on cryptocurrency exchanges.
Despite a sharp general downward trend over the past year, domestic increases in supply – when traders send coins back to their exchange accounts for potential quick sales – usually reflect a more selling mindset.
This does not apply to every exchange this week. According to the monitoring resource Bybt, 16222 BTC has come to Binance’s world-leading list in the last seven days. In contrast, the Coinbase Pro business platform lost 11,947 BTC, which is in line with the general trend.
However, Binance is not alone – OKEx, Huobi, Bitfinex and Kraken have all increased their BTC balances over the past 24 hours.
As the Cointelegraph reported, a familiar face from previous mood swings returns this week – greed.
The Cryptocurrency Fear and Greed Index, which measures the sentiment of traders using a basket of weighted factors, shows that the desire to sell increases even if the price action is no longer positive.
On Tuesday, the index gave a comprehensive assessment of the cryptocurrency market in relation to 68/100, which corresponds to “greed”, which is the driving force for the general mood.
An indicator of fear and greed for encryption. Source: Alternative.me
This is still lower than the mid-1990s, seen earlier this year – a level that almost guarantees a sell-off – but volatility ensures that the index does not stay in the same area for long. “Greed” can turn into “extreme greed” or “intense fear” in a matter of days or even faster.
On April 27, for example, the index was only 27/100.
Dogecoin is increasing the pressure on Bitcoin alternative currencies
Last but not least, this is perhaps the most obvious factor that affected Bitcoins’ congestion this week: altcoins.
First, it was Ether (ETH) that topped the package and went past Bitcoin, pushing over $ 3,000 to full-time highs on Monday.
Dogecoin (DOGE) now leaves everything in the dust, back over $ 0.47 after merging with the popular eToro trading platform.
DOGE / USD is up 72% during the week, up from 3% at the time of writing.
Line chart of BTC / USD versus DOGE / USD. Source: TradingView
While altcoin collections occur on a regular basis, analyst sentiment has increasingly become one of the long-term trends emerging before Bitcoin can regain lost time and dominate the market.
According to the Cointelegraph report, this is an indication that the total market value of altcoin may grow by more than 27,000% in early 2022.
“The next 2-3 months will be good for altcoins,” summed up a popular Twitter trader known as Johnny’s followers, also predicting the closest target price of $ 5,000 per ether.
Bitcoin’s market share is currently 46.3%, which is further down due to the influx of digital currencies.