Bitcoin, ether nurse losses, lurk near critical levels

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HONG KONG/SINGAPORE, Nov 17 (Businesshala) – Bitcoin and ether, the world’s two biggest cryptocurrencies, remained weak on Wednesday and analysts believe they are near critical levels that could lead to further weakness if breached .

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Bitcoin last traded at $59,000, down 1% that day, and is down nearly 12% from its record high of $69,000 on November 10, while Ether was at $4,163, down 14% from its peak $4,868. .

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While profit-taking was becoming the biggest factor following the massive price jump, analysts pointed to bitcoin’s blockchain upgrade over the weekend, high US inflation and China’s latest directive to its state-owned firms not to engage in cryptocurrency mining. did. Other reasons behind the more alert feeling.

The price of bitcoin has doubled since January. If it falls below $58,000, its correction could be serious, said Craig Erlam, senior market analyst at online broker Oanda, in a note.

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“This largely found strong support in late October and, given how much it is struggling to make major progress, it could be a catalyst for a deeper recovery,” Erlam wrote.

News that Twitter will not invest in cryptocurrencies and the US Securities and Exchange Commission (SEC) rejected an earlier US spot bitcoin exchange-traded fund by VanEck.

“It looks like we may be seeing some messy two-way action, and it wouldn’t be surprising to see 68,000 on the upside, 57,000 on the downside.” Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note.

Over the past week, traders have become less willing to pay to hold long positions in bitcoin futures. According to cryptocurrency analytics platform Cryptoquant, the average funding rate fell to 0.00354% on Tuesday, the lowest since late September and down from 0.04122% on November 10th.

Funding rates represent sentiment in the perpetual swap market, which is a major part of the bitcoin derivatives world. Positive funding rates mean traders are bullish, as they have to pay to hold a long position, while negative rates mean traders have to pay to hold a short position, and are therefore bearish.

“With funding rates now declining to neutral levels, there appears to be a healthy balance between long and short demand in the market,” crypto analysts at Arcane Research said in a research note.

Data from digital asset manager CoinShares showed a record $9 billion in losses this year from pouring money into bitcoin products and funds, with investments totaling $151 million for the 13th week in a row last week.

Although recent flows have been positive, volumes have moderated in the second half, averaging $750 million daily versus $960 million, CoinShares said.

Singapore-based digital economy trading firm QCP Capital pointed to a relatively heavy sell-off in Ether (ETH) and said that options on that token could continue alongside a pick-up in activity.

“We have become fairly neutral after this awaited leverage wash-out. We expect BTC to be stuck around 60,000, given the severity of the strike. And perhaps more volatility in ETH and altcoins,” he wrote in a post on social media platform Telegram.

Editing by Robert Birsella

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