Crypto Market Glows Green As Bitcoin Tries To Test For Bullish Divergence

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The cryptocurrency market is back in the green on Monday, January 10, showing signs of positivity even though the total market cap is currently below $ 2,000 billion.

In particular, the market lost around $ 230 billion in the first week of 2022, falling from $ 2.25 trillion on December 31, 2021 to $ 1.9 trillion on January 7, 2022. Total global market capitalization of crypto currently stands at $ 1.97 trillion, or 0.70. % increase in the last 24 hours.

1-day market capitalization of the cryptocurrency sector. Source: CoinMarketCap

Notably, the total volume of the crypto market in the previous 24 hours decreased by 21.54% to reach $ 71.80 billion; However, DeFi’s volume increased 18.41% to $ 13.22 billion. Stable coin volume is currently $ 55.58 billion, representing 77.41% of the 24-hour volume of the cryptocurrency market.

Bitcoin and Ethereum hit hard

Large cap tokens like Bitcoin and Ethereum have been at the forefront of capital outflows. Market watchers attributed the drop to the Federal Reserve’s debt reduction efforts, which were implemented in the face of rising inflation.

The fall began in December when the Federal Reserve signaled it would take more urgent action to tackle rising inflation, which resulted in lower market confidence.

Some of the larger cryptocurrencies saw significant support levels, followed by selloffs. Take, for example, the rapid drop in the price of Bitcoin on January 5, when it went from $ 46,000 to around $ 42,000 in less than three hours.

The latest information from on-chain market analysis platform Glassnode reveals that the dominance of the long Bitcoin liquidation has reached 69%, the highest level since May 2021. Notably, the vast majority of liquidations in the futures markets over the past few weeks have been caused by longtime traders.

Glassnode said:

“Bitcoin’s long-standing dominance of the liquidation reached 69%, the highest level since the May 2021 deleveraging event. This means that the majority of futures market liquidations over the past few weeks were traders of long time trying to grab the knife. “

Dominance of long-term liquidations of Bitcoin futures contracts. Source: glassnodeBitcoin holds over $ 40,000

Currently, the price of Bitcoin is trading at $ 41,882, up 0.57% on the day but down 10.70% last week with a total market cap of $ 792 billion, according to statistics from CoinMarketCap. .

1 day Bitcoin price chart. Source: CoinMarketCap

In the past 24 hours, Bitcoin has traded in a range of between $ 41,400 and $ 42,600, and prominent crypto-trading analyst Michael van de Poppe noted that Bitcoin needs to cross $ 42,800 – 42,900. $ and a test of $ 45,600 is possible with a bullish divergence.

Bitcoin / USD Chart. Source: Michael van de Poppe

According to van de Poppe, the lower support range of the support area is between $ 38,000 and $ 40,000. He stated:

“The crucial support area is still where we are currently relying, in which all that block that we have here between $ 38,000 and $ 40,000 is certainly the lower end of the support that I would prefer to see transported.”

The analyst added:

“The next level of resistance we need to break through is the entire $ 46,000 area, so this is the scenario I’m looking at where, in a shorter time frame, we are looking for a relief rally towards $ 46,000. After which we remove the low once more to create a bullish divergence, and after this bullish divergence the markets are anxious to have a reversal as the trend is downward quite quickly.

Elsewhere, other leading cryptocurrencies such as Chainlink (LINK) and Intercomputer (ICP) managed to perform well last week despite the market downturn. LINK is up 4.13% on the day and 23.97% over the past week, trading at $ 27.43; Likewise, ICP rose 3.76% in the last 24 hours and 33.97% in the previous seven days, changing hands to $ 36.33.

Disclaimer: The content of this site should not be taken as investment advice. Investing is speculative. When you invest, your capital is at risk.

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