New Title
Jul 26, 2023  |  News

Bitcoin, Ether Lose Direction as Caution Rules Market

(Forkast)  Bitcoin traded flat on Wednesday morning in Asia as risk-aversion remained the market theme, though the token managed to hold above US$29,000. Analysts say a possible extended legal fight between the U.S. regulator and Ripple Labs as well as comments from the Federal Reserve on the interest rate outlook expected later today is breeding caution. Ether also treaded water, while other leading tokens were a mixed picture. Dogecoin led the winners again on speculation it may be integrated into Twitter as the social media app gets revamped into a more general-purpose platform. Elsewhere, the Forkast 500 NFT index dipped and U.S. equity futures traded mixed after Wall Street closed higher on Tuesday.

Bitcoin lacking catalysts

Bitcoin inched 0.14% higher over the last 24 hours to US$29,222 as of 07:35 a.m. in Hong Kong, but lost 2.07% for the week, according to data from CoinMarketCap. After briefly falling to a monthly low of US$28,890 on Monday, the world’s leading cryptocurrency has seemingly found support around US$29,000.

“Several factors are currently affecting Bitcoin and cryptocurrencies, including concerns about the Ripple case resumption and investors’ speculation on Bitcoin investment funds,” Rania Gule, an analyst at Cyprus-headquartered multi-asset broker XS Group, said in an emailed comment. 

The market is keeping a close eye on the Federal Reserve’s interest rate decision, while negative headlines about Binance, the world’s largest digital currency exchange, contributed to price declines across crypto, Gule added.

“The main trendline support currently stands at $26,800, and as long as Bitcoin remains above it, the trend is expected to be bullish,” said Gule.

William Cai, co-founder and managing partner at New York-based asset manager Wilshire Phoenix, said Bitcoin has been trading within a tight US$25,000 to US$30,000 range and is in search of a story and “a major Fed rate or language surprise this week could provide the impetus needed to break out.”

Reflecting the current lacklustre trend, CoinMarketCap’s fear and greed index, a measure of market buy and sell sentiment, fell further into neutral territory on Wednesday with a reading of 52.

The caution was reflected in digital asset investment products that saw net outflows of US$6.5 million in the week ending July 21, following four prior weeks of consecutive inflows that totaled US$742 million, according to a Monday report from European cryptocurrency investment firm CoinShares. 

Continue reading on Forkast