We were waiting for Bitcoin at $60,000 — we received $40,000: the crypto market continues to fall

The number of predictions that came true in the crypto market turned out to be much less than the number of failed ones. Prediction that the launch of spot ETFs in the US would instantly lead to a Bitcoin rally turned out to be unsuccessful. Everything turned out exactly the opposite.

Bitcoin

Bitcoin fell by 3.7% in the week from January 19 to January 26, 2024. During trading on Tuesday, January 23, BTC dropped below $39,000 for the first time since December 2. Almost all trading sessions were accompanied by low volatility (the change was less than 1%), with the exception of Monday, January 22, when the price immediately decreased by 4.89%.

Source: tradingview.com

Bitcoin has been falling for the second week. What is the secret of such dynamics? The founder of the analytical platform СryptoQuant, Ki Young Ju, believes that the main problem is sales in the derivatives market. At the same time, the expert still advises holding BTC:

“Accumulate Bitcoin as an Institutional Investor. Downturns are due to selling in the derivatives market, not due to ETF companies like Grayscale. The OTC market is very active but has no influence on BTC prices. The accumulation will end completely when on-chain activity in the OTC market and ETFs subsides. This will be the start of a bullish trend.».

In the near future, the downward trend may continue due to the sale of Bitcoin seized from the illegal marketplace Silk Road. The United States authorities issued a decree on the sale of BTC worth about $130 million.

The analytical portal Santiment blames FUD for the decline in Bitcoin, or rather, experts describe the current situation colorfully:

“Bitcoin plummets below $40,000 for the first time since December 4. Monday was a bloodbath for much of the crypto sector. Note that there is now 35% less talk around Bitcoin and 21% less talk around Ethereum compared to the week before the ETF was approved. This is an ongoing FUD.”

From the point of view of technical analysis, the explanation for the current situation is the most banal: there is no eternal growth. From September 11, 2023 to January 11, 2024, BTC gained almost 97%. A correction of 21.5%, which has already occurred, is quite expected. It is quite obvious that a number of holders decided to take profits.

In the last four days, from January 23 to 26, the decline slowed. However, it is not yet possible to say that the trend has become bullish. Indicators still speak in favor of a bearish trend. The RSI is below 50 and the price is below the 50-day moving average (in blue). The support level is the minimum of January 23 – $38,505, the resistance level is $44,729.

Source: tradingview.com

The fear and greed index continues to remain in the neutral zone. Compared to last week, the figure decreased by two points and is 49.

Ethereum

Ethereum fell by 10.85% in seven days, from January 19 to January 26, 2024. The week turned out to be quite unique — all trading sessions, without exception, ended in the red. The worst day for the bulls was Monday, January 22, when ETH fell by almost 6%.

Source: tradingview.com

If at first Bitcoin was far ahead of Ethereum in the fall, now the second cryptocurrency by capitalization is clearly ahead of the first. What contributes to this? The main reason is sales of major market players. Recently it became known that the bankrupt credit company Celcius Network transferred 443,961 ETH to centralized exchanges, which is equivalent to almost $1 billion. Such large tranches are not new to it. Last week, the transfer of MATIC tokens for a large amount to the Binance exchange was already described.

The Securities and Exchange Commission (SEC) continues to delay applications for spot Ethereum ETFs. Exchange-traded fund applications from BlackRock and Grayscale will be reviewed until May 23, 2024.

Ethereum developers continue to hold events dedicated to the Dencum update. On January 24, it was announced that the next steps for the project will take place on January 30 and February 7, 2024. On the first date, Dencum will be deployed on the Sepolia test network, and on the second date – on the Holesky network. If everything goes smoothly, implementation on the main network will take place by early March 2024. The Ethereum Foundation announced such plans in its official blog.

From the point of view of technical analysis, the situation with ether is no fundamentally different from Bitcoin. The correction is in full swing. The price went below the 50-day moving average (indicated in blue). The RSI is declining and is less than 50. The support level is $2,140.8, the resistance level is $2,400.

Source: tradingview.com

Chainlink

The Chainlink cryptocurrency lost more than 14.5% from January 19 to January 26. The situation with Ethereum was repeated: all trading sessions were in the red. Attempts to overcome the $17 mark were unsuccessful.

Source: tradingview.com

Chainlink has been stagnating lately. Weeks of growth alternate with periods of decline. This may be due to a decrease in network performance. In any case, analysts of the Santiment platform provide data according to which the daily number of users over the past three months has decreased from 9,700 to 4,000. During the same period, the number of new wallets that join the blockchain fell from 3,000 to 1,100. The numbers suggest that interest in Chainlink is not high at the end of January 2024.

The platform itself is currently focusing more on tokenizing assets from the real world, concluding agreements with various companies. One of them was the famous British bank HSBC, which launched a platform for trading tokenized gold in December 2023. Other notable Chainlink tokenization partners include Swift, Australia's ANZ Bank and America's DTCC Financial Corporation.

From the point of view of technical analysis, the cryptocurrency has been flat for almost three months, starting on November 9. The support and resistance levels are $12.55 and $17.66. That said, there is some dominance of bears over bulls among Chainlink investors, as evidenced by the location of the 50-day moving average (in blue), which is above the price:

Source: tradingview.com

Conclusion

We see that the fall in the crypto market that began after the launch of spot Bitcoin ETFs continues. Experts see different reasons: FUD, sales in the derivatives market, and simply profit-taking by crypto investors plus traders.

This material and the information contained herein do not constitute individual or other investment advice. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.