Bitcoin, Ether Nurses Losses, Lurking Near Critical Levels

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A representation of the virtual cryptocurrency bitcoin can be seen in this photo illustration taken on October 19, 2021. REUTERS / Edgar Su / File Photo

HONG KONG / SINGAPORE, Nov. 17 (Reuters) – Bitcoin and ether, the world’s two largest cryptocurrencies, remained weak on Wednesday and near critical levels that analysts say could lead to further weakness in the event of violation.

Bitcoin last traded at around $ 59,000, down 1% on the day, and around 12% from the high of $ 69,000 set on November 10, while ether was at $ 4,163, more than 14% below its high of $ 4,868.

As profit taking after the massive price hike became the biggest factor, analysts pointed to Bitcoin’s blockchain upgrade over the weekend, rising inflation in the United States and the latest one. China’s directive to its state-owned enterprises not to engage in cryptocurrency mining as other reasons behind the more cautious sentiment.

Bitcoin has doubled in value since January. Its correction could become severe if it drops to $ 58,000, said Craig Erlam, senior market analyst at online broker Oanda, in a note.

“This is pretty much where he found strong support in late October and given how hard he has struggled to make major progress since, this could be the catalyst for a deeper correction,” wrote Erlam.

The news that Twitter would not invest in cryptocurrencies and the rejection by the United States Securities and Exchange Commission (SEC) of what would have been the first U.S. cash bitcoin exchange-traded fund by VanEck have also been brakes.

“It gives the impression that we might see some messy two-way action, and it wouldn’t be surprising to see 68,000 cap the upside, 57,000 the downside.” Chris Weston, head of research at broker Pepperstone in Melbourne, wrote in a client note.

Ether and Bitcoin YTD

Over the past week, traders have become less willing to pay to hold long positions in Bitcoin futures. Average funding rates fell to 0.00354% on Tuesday, according to cryptocurrency analysis platform CryptoQuant, their lowest since late September and down from 0.04122% on November 10.

Funding rates represent sentiment in the perpetual swap market, an important part of the bitcoin derivatives world. Positive funding rates imply that traders are bullish because they have to pay to be long, while negative rates mean traders have to pay to be short, and therefore bearish.

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

Money poured into bitcoin products and funds hit a record high of $ 9 billion this year and totaled $ 151 million last week in the 13th consecutive week of influx, data from the manager showed Monday. of CoinShares digital assets.

Although flows have been positive recently, volumes have been subdued in the second half, averaging $ 750 million per day compared to $ 960 million in the first, CoinShares said.

Singapore-based digital economy trading firm QCP Capital highlighted the relatively larger sell-off of Ether (ETH) and said this could continue, alongside a resumption in options activity on this token.

“We have become fairly neutral after this expected leverage. We expect BTC (bitcoin) to remain stuck around 60,000 given the severity of the strike. And maybe more volatility in ETH and altcoins, ”they wrote in a post on social media platform Telegram.

Editing by Robert Birsel

Our Standards: The Thomson Reuters Trust Principles.

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