The cryptocurrency market is showing signs of exhaustion on Friday as traders are being met with declining prices after weeks of double-digit gains and coin hopping amid a ramping bull market that many analysts believe will last for another year.
Bitcoin (BTC) now finds itself retesting the lower support level of the range it has been trading in since Valentine's Day, with bears looking poised to drop the top crypto below $50,000, which analysts say would actually be healthy as BTC has been running hot for over a month.
BTC/USD Chart by TradingView
“After a phenomenal week, the crypto market has primarily been moving sideways over the past seven days,” said Rachel Lin, CEO and co-founder of SynFutures. “Bitcoin is down around 1.5%, while the overall crypto market cap is up by 0.5%. This sideways move is expected after last week's 16% positive move.”
Lin noted that while BTC has stalled below $52,000, “Ethereum, the second biggest cryptocurrency, is powering on from last week's performance and has increased by another 5% this week.”
ETH/USD Chart by TradingView
“The perception of a future ETH ETF is creating an ETH over-performance BTC,” she said. “The ETF trade has now moved from Bitcoin to Ethereum. Recent news reports about the SEC approaching Coinbase about clarification for ETH ETF have fueled the FOMO even more.”
“While the mood is mainly positive, the charts face technical resistance,” Lin said. “Ethereum has yet to sustain over $3,000; we can witness heavy selling near that zone.”
“Meanwhile, Bitcoin is consolidating between $51,000 and $52,000,” she added. “A minor retrace is expected after a strong run-up like what we witnessed last week. In Bitcoin's case, we might see a retrace to $50,000, and if that breaks, the 48,000 – 48,500 zone would likely act as the next level of support. In Ethereum's case, 2850 and 2700 could be the following two support zones.”
Zooming out to the macro picture, Lin noted that “while most of us in the Web3 community celebrate the beginning of the bull run, it's essential to remember that the number of nay-sayers has not gone down despite the price action. A recent report by the European Central Bank (ECB), where they doubled down on Bitcoin having zero value, highlights cryptocurrencies' distrust and opposition from certain sections of traditional finance.”
While the number of naysayers and detractors remains high, the top crypto has flipped one prominent figure, former U.S. President and current presidential hopeful Donald Trump, from negative to neutral.
During a recent interview on Fox News, Trump was asked about his views on the rise of China’s digital yuan and whether the right way to counter it is through a decentralized currency network, such as Bitcoin.
“I like the dollar, but many people are doing it [using Bitcoin], and frankly, it’s taken a life of its own,” Trump said. “You probably have to do some regulation, as you know, but many people are embracing it. And more and more, I’m seeing people wanting to pay Bitcoin, and you’re seeing something that’s interesting. So I can live with it one way or the other.”
While his statement is not a ringing endorsement for Bitcoin, it's a vast improvement from comments he made while president, which were anti-BTC in nature, referring to the top crypto as a scam and reportedly ordering the treasury secretary to “go after Bitcoin.”
With many politicians on the Democratic side of the aisle pushing back against cryptocurrencies in general, many commenters on X saw this as a move to garner support from the crypto community and find out which issues are most popular with the voting public.
At the time of writing, Bitcoin trades at $51,111, a decrease of 1% on the 24-hour chart.
