Crypto Market Indicators Suggest Near-Term Consolidation, Breather For Bitcoin
Indicators of the cryptocurrency market, such as average bitcoin funding rates, inflows into crypto investment products, and the ratio of old-to-new coins traded, point to a near-term consolidation for the sector and decreased odds of the year-end rise predicted by bitcoin bulls.
Bitcoin increased 1.6 percent to $57,850.56 on Friday, but it was on track for its worst week since May, with weekly losses of above 11%. It’s down 16% from its record high of $69,000 set on November 10th. Ether, the second-largest cryptocurrency by market capitalization, was down 14% from its high of $4,202.45.
Profit-taking when bitcoin achieved those highs, as well as its increased vulnerability to global inflation predictions and regulatory headwinds, were mentioned by market players as reasons for the week’s falls.Concerns that creditors of Mt Gox, a cryptocurrency exchange that went bankrupt in 2014, would be forced to liquidate their bitcoin-denominated debts impacted on sentiment as well.
Traders have been less ready to pay to retain long positions in bitcoin futures in the last week. According to cryptocurrency analytics company CryptoQuant, average funding rates, a barometer for sentiment in the perpetual swaps market, have dropped to roughly 0.008%, the lowest since early October.
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