Crypto market has increased volatility

Market Picture

In the outgoing week, Bitcoin updated an all-time high, approaching a price of $110K and dragging the entire crypto market up with it. On Friday morning, capitalisation is moving up again, settling above $3.63 trillion. The market needs time to adjust to the current highs, and so far, there are more signs that this is a pause before further growth rather than the market hitting impenetrable resistance.

That said, the sentiment index has been cruising in the greed zone, only going to extreme greed once. As was the case in mid-December, high sentiment index values intensified the selling.

Bitcoin fell below $100K during the week, then approached $110K before gently re-emerging at 102K. The selling intensified on the approach to the peak of $110K in December and in January.

However, support has also shifted above $100K, meaning market participants are now getting used to a six-figure price. Additionally, the market continues to bounce around mentions of Bitcoin and cryptocurrency reserves by Washington officials, which adds volatility but doesn’t help with direction.

News Background

If investors of all categories, from private to institutional, decide to allocate between 2% and 5% of their portfolios to the first cryptocurrency, its value could reach the $700,000 mark, BlackRock CEO Larry Fink said.

Goldman Sachs CEO David Solomon commented that Bitcoin does not threaten the dollar’s status as a reserve currency, remaining a speculative asset. From a regulatory perspective, he said, the bank still cannot own and transact in the first cryptocurrency.

Trading in XRP and SOL futures on the CME could begin on 10 February if approved by regulators. Such information appeared on a subdomain of the CME Group platform. A spokesperson for the exchange said that the beta version of the website was in the public domain ‘by mistake,’ and no decision has yet been made to launch the contracts.

Investment firm Bitwise has filed an application to register the Dogecoin-based ETF (DOGE) with the Delaware (US) Department of State’s Division of Corporations. Decrypt notes that asset managers typically register legal entities with the state before filing formal applications with the SEC.

Member of the US House of Representatives Gerald Connolly called for an investigation into possible conflicts of interest in connection with cryptocurrency projects of Donald Trump. In his opinion, it potentially violates ethical norms and creates risks to national security.

The FxPro Analyst Team