Bitcoin is calmly forming a bottom

Market picture

The crypto market remains detached from movements in traditional financial markets. Bitcoin continues to hover around $17K, despite the S&P 500 is down 1.5% and the Nasdaq down 2%. The capitalisation of the entire crypto market is unchanged overnight, remaining at $853bn.

Cryptocurrency enthusiasts are waiting for ideas and news that could move the market forward. And the very fact that stocks are falling without dragging crypto down points to the technical nature of the latest correction after an impressive rally.

Glassnode recorded a weakening pace of bitcoin investor capitulation. The trend in realised losses after the FTX collapse has subsided, while there has been a positive shift in on-chain activity.

On weekly timeframes, the current lull forms a bullish divergence between the price and RSI chart, with lower local lows corresponding to higher index levels. This is a signal of bottom formation, often followed by a reversal to the upside. It is usually relatively slow and fragile at the first stage. At the end of 2018, we saw almost four months of near-zero momentum before a rally began that tripled the price.

News background

Bitcoin’s mining difficulty fell 7.2% to 34.24 terahash amid a shutdown of outdated, unprofitable ASIC miners. This is the most significant drop since July 2021, when China banned mining.

Goldman Sachs plans to spend “tens of millions of dollars” to buy or invest in cryptocurrencies whose valuations have fallen due to the FTX collapse.

Texas Senator Ted Cruz said cryptocurrency mining is essential to the US energy system. He said he invests in bitcoin because the government does not control it and only buys BTC every week.

Mad Money show host Jim Cramer believes the cryptocurrency market will collapse in 2023, so he urged investors to sell all their crypto assets.

Renowned cryptocurrency sceptic Peter Schiff has again predicted a massive collapse of the entire cryptocurrency market. He believes the BTC exchange rate could fall as low as $5000.

Former trader Jordan Belfort, known as “The Wolf of Wall Street” and who previously predicted the collapse of the FTX exchange, urged investors to stay away from all cryptocurrencies except Bitcoin and Ethereum.

The FxPro Analyst Team