Crypto market finds support despite low sentiment

Market Overview

The crypto market cap regained 0.9% after an earlier collapse, recovering to $2.30 trillion. Heavyweights Bitcoin, Ethereum, BinanceCoin, and XRP have reached significant support levels. We can expect consolidation to begin here. At the same time, it should come as no surprise if optimists promote the idea of a return to a bull market.

Today’s sentiment index fell to 5, repeating the historical low for this indicator from August 2019. There are also similarities with June 2022, when we saw many values below 10 that month. In both periods, the lowest sentiment readings were far from the best entry points, though some pullback and consolidation followed.

Bitcoin is trading at $67K, extending a sequence of lower intraday highs and lows, albeit at a considerable distance from last week’s extreme lows. This dynamic suggests a return to last week’s lows, with a high probability of a trading range of $60-70K forming over the coming weeks.

News Background

Bitcoin lost all its gains after Donald Trump’s victory in the US presidential election in November 2024, Wintermute notes. The drivers of the decline were pressure from US capital, a significant outflow of funds from spot ETFs and a shift of liquidity to the artificial intelligence sector.

Glassnode states that the cryptocurrency market now resembles the 2015-2017 cycle, marked by moderate drawdowns, and suggests Bitcoin’s October peak may have signalled the end of the bullish phase.

Bitcoin no longer correlates with gold, and its short-term movements are more dependent on technology stocks, Grayscale notes.

Goldman Sachs has significantly reduced its positions in spot ETFs based on Bitcoin and Ethereum in favour of new altcoin ETFs, according to its Q4 report. Bitcoin assets were reduced by 39.4% during the quarter, while Ethereum investments fell by 27.2%.

According to CoinDesk, the Arkham Exchange cryptocurrency trading platform, created by the Arkham Intelligence analytics service, will be closed due to low user adoption.

The FxPro Analyst Team