Markets
What Bitcoin and Ethereum Trading Reveals About the Future of the Cryptocurrency Market
- A measurement of exchange flow showed that the local bottom could be reached for BTC, ETH.
- Market sentiment was not bullish and the behavior of holders at crucial support levels would be critical for the next price movement.
Bitcoin [BTC] And Ethereum [ETH] the bulls have struggled to shift market dynamics in their favor. Significant losses over the past ten days mean the price has returned to a support zone where buyers are expected to stop sellers.
Ethereum MVRV and NVT reports showed that the asset might be undervalued. The liquidity pocket at $3,500 could see a short squeeze, but otherwise the momentum would be bearish.
Meanwhile, another BTC investigation showed that mining activity had retreated and miners were selling Bitcoin. However, the selling pressure had started to diminish in intensity over the past two days.
AMBCrypto decided to examine the movement of both assets from the exchanges to gauge market sentiment. This revealed that the bulls may not have much to cheer for yet.
What does the net trade flow metric indicate?
The net foreign exchange flows indicator provides valuable information about the market. When flows are positive, it indicates that inflows are greater.
This in turn is a sign of potential selling pressure on the asset, as it involves participants sending the crypto to exchanges to sell.
Values below zero mean that outflows are larger, which is a good sign for buyers.
This indicates that market participants are removing their assets from exchanges, likely to a safer storage location, and indicates a buildup.
Source: CryptoQuant
The 30-day simple moving averages were used to better understand trading flow trends. ETH inflows were considerable in mid-March and towards the end of May.
Both events marked a local high for the price.
Over the past month, the net flow has been sharply negative, showing accumulation. Over the past eight days, outflows have slowed, but the 30DMA net flow has remained in negative territory.
Source: CryptoQuant
Meanwhile, Bitcoin saw steady accumulation throughout February and March. The 30DMA showed that the flow of BTC out of exchanges continued to dominate.
In late April and on May 21, there were spikes in BTC inflows, but they were exceptions to the trend.
Are Bitcoin and Ethereum Heading for Consolidation?
Source: In the block
AMBCrypto’s review of IntoTheBlock’s inflow/outflow data highlighted key support regions.
The inflows/outflows around the price have shown that Ethereum has a strong support base between $3,080-$3,180 and $3,280-$3,381. Similarly, the $3,486-$3,586 range also acts as a strong resistance.
Source: In the block
Read Bitcoin [BTC] Price forecast 2024-25
For Bitcoin, the support zone lies between $59,450 and $61,263, and the resistance zone lies between $63,148 and $64,960.
This means that the current price consolidation of these two crypto market leaders could be limited to these levels and lead to the formation of a range.