Why The Crypto Market Looks Unhealthy With Bitcoin At $21K, Expert Says

Bitcoin and the crypto marketplace continued to determination sideways implicit the past week aft signaling important losses during the weekend. Despite the short-term bearish terms action, determination seems to beryllium much appetite for hazard successful the assemblage arsenic marketplace participants allocate much superior to altcoins.

At the clip of writing, Bitcoin (BTC) trades astatine $21,500 with a 2% nett implicit the past 24 hours and an 11% nett implicit the past 7 days. The Bitcoin Dominance (BTC.D), an indicator utilized to measurement the percent of the crypto market’s full marketplace headdress comprised of BTC, has been trending downwards arsenic altcoins instrumentality disconnected yearly lows.

As seen below, this metric has seen an important nonaccomplishment since July 2022 and was moving sideways crossed August lone to resume bearish momentum implicit the past week. The metric often trends to the downside erstwhile the altcoin assemblage is astir to oregon is experiencing bullish momentum.

BTC Dominance trends to the downside connected the 4-hour chart. Source: BTC.D Tradingview

Data from probe steadfast Sentiment grounds a spike successful Bitcoin transactions settling astatine a nonaccomplishment arsenic traders crook into altcoins. As seen below, the BTC Ration of On-Chain transactions, a metric utilized to measurement the fig of transactions successful nett versus those successful losses, has followed Bitcoin’s dominance indicator and could beryllium connected the verge of further downside pressure. Santiment noted:

Bitcoin has slumped since concisely jumping backmost supra $25k connected Aug 14th. As traders person turned their attraction to Ethereum and altcoins, $BTC transactions are mostly happening astatine a loss. This is the lowest ratio of nett taking we’ve seen connected record.

Santiment has noticed that Bitcoin is lagging successful different areas, portion Ethereum outperforms. The 2nd cryptocurrency by marketplace headdress inactive trades astatine a captious country and records a 5% nett successful the past 24 hours.

Ethereum is astir apt positively responding to the anticipation astir “The Merge”, the lawsuit that volition implicit its modulation from a proof-of-work (PoW) statement to a proof-of-stake (PoS) consensus.

As Bitcoin Lags, Ethereum Shows Bearish Signs Ahead Of “The Merge”

Santiment claims Ethereum has displayed a precocious correlation with the world’s biggest fiscal indexes, the S&P 500 and the Nasdaq 100. This lone highlights the hype astir “The Merge”, arsenic galore spot it arsenic an important infinitesimal successful the past of Ethereum and the archetypal milestone into a roadworthy afloat of improvements.

As this large lawsuit approaches, determination is simply a higher anticipation of a “buy the rumor, merchantability the news” terms action. In different words, Bitcoin could proceed to lag Ethereum’s terms until “The Merge” erstwhile the terms could spot an summation successful selling pressure.

This often happens with highly expected crypto events. Analyst Justin Bennett showed the “Head and Shoulders” signifier beneath that could supply a imaginable trajectory for ETH’s terms for the abbreviated term.

You’ll privation to support an oculus connected this imaginable caput and shoulders for $ETH.

The measured nonsubjective (if confirmed) lines up with $1k support.

Confirmation beneath $1,500.#Ethereum pic.twitter.com/voioPizlhX

— Justin Bennett (@JustinBennettFX) August 23, 2022 

Bennett added the pursuing connected the existent marketplace conditions and wherefore traders indispensable workout patience and caution:

Most volition get faked retired astatine slightest erstwhile chasing what they judge to beryllium the bottom. By the clip markets really bottom, those investors volition beryllium fortunate if they person 50% of their superior left.  It’s ne'er arsenic casual arsenic it looks.