Technical analysis

Crypto turns gloomy

Market Overview

The crypto market has lost 2% over the past 24 hours, falling to $2.57T, its lowest level in six weeks. The market has been in a fairly steady downtrend for almost a month, with occasional pauses, and is down more than 14% from its peak. It appears that the bears will not face serious resistance until the $2.48T region, where the 200-day moving average lies, and that level is not far from bear market territory ($2.36T). Sell-offs dominate among the most liquid coins, led by Near Protocol (-8.5%), Dash and Aave (-5% each). The top three performers of the day are Tron (+1.8%), XRP (0%) and Filecoin (-0.8%).

Fig. 1. The crypto market has been on a downward trend since the start of October.

The sentiment index has plummeted to 26, just 1 point above the extreme fear zone and a three-month low. The last similarly dramatic shift in sentiment occurred in October last year, after which the indicator stayed in the lower half of its range for an extended period. However, unless equities see a repeat of the dot-com crash, growth is more likely to resume.

Fig. 2. The sentiment index is on the verge of extreme fear.

Bitcoin has returned to last week’s lows, trading at around $76.6K. Near this level lies a significant support zone, which has held back sell-offs since the second half of August, with its lower boundary just below $75K. In this case, we see the 200-day moving average at $73K as stronger support. The market looks bleak enough to test the most important support levels of recent months, with no hope of a sudden reversal in the absence of a catalyst.

Fig. 3. Bitcoin has returned to its recent lows and may fall further.

News Background

Bitcoin has held support just above $76K following the $6.3 billion Binance hack. However, weak institutional demand, escalating tensions in the Middle East and the theft of 18,270 BTC are putting pressure on the market, according to QCP Capital.

Investors who bought Bitcoin worth $707 billion are currently sitting on losses. Only coins worth $380 billion remain in profit, according to CryptoQuant’s calculations. Many will want to sell as soon as the price returns to their purchase level, which will hold back growth.

The number of active addresses on the Bitcoin network has almost halved from its December 2024 peak, and the decline is already comparable in scale to that of 2018, notes analyst Axel Adler Jr. For investors, this is a worrying sign: with low network activity, demand for BTC may remain sluggish for some time.

The decline in network activity coincides with a cooling of interest among US investors. Bitcoin on Coinbase is trading at its widest discount to Binance since the FTX collapse in November 2022, CryptoQuant points out.

Strategy has resumed buying Bitcoin after a week-long hiatus. The company purchased a further 811 BTC last week at an average price of $80.8K per coin. It now holds 849,327 BTC at an average price of $75.5K.

Strive has sharply reduced the pace of its Bitcoin purchases after two weeks of record-breaking acquisitions this year, buying just 124 BTC. Strive’s Bitcoin reserves have risen to 43,124 BTC at an average price of around $82.7K. The company ranks fourth among public companies by Bitcoin reserves.

Last week, BitMine purchased an additional 8,573 ETH, bringing the total amount of Ethereum in its reserves to 6.06 million ETH (4.96% of the total supply). To reach its target of purchasing 5% of the total ETH supply, the company needs to buy a further 42,000 ETH or so.

The FxPro Analyst Team

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