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Bitcoin plunges below the $22,000 mark as on-chain data shows signs of weakness.
According to data provided by Glassnode, another positive for Bitcoin during this period is that the number of non-zero addresses on the network has reached an ATH of 43.8 million. The large number of active addresses shows that many people are using and holding their Bitcoins.
According to CryptoQuant, BTC reserves on exchanges have decreased over the past week, indicating a decrease in selling pressure, which is a positive sign for the market. Despite the above signals, Bitcoin had a rough day, plunging below $22,000. After failing to hold the $23,000 region, BTC turned down over $1,000, establishing a local bottom at $21,688 before rebounding slightly back around $21,900 for the time being.
Besides the positive signals, BTC is also facing a factor that can increase selling pressure.
Miners can sell their shares if they are facing a dwindling balance and declining revenue. According to data from Glassnode, miner balances have dropped significantly over the past month, reaching a 1-month low at 1.8 million BTC. If mining revenue continues to decline, miners will be forced to sell their BTC for a profit.
However, Bitcoin’s MVRV rate is falling, indicating that BTC holders are not going to sell their positions anytime soon. Although most of the addresses holding BTC are short-term investors, it seems that all investors are willing to wait to sell their holdings for a profit.
Many traders shared their profitable BTC shorts, as the price of the leading crypto asset fell to a local bottom at $21,600.
The trading pair has dropped below the support zone between $22.351 and $23.362. A recapture of $22.351 means a rally is forming with the potential to lead the price towards $23.362. Based on the 1-day Bitcoin price chart, $21,286 is the key support level for the asset. If BTC remains above this level, the market will still be able to trigger a short-term rally.
During this time, Open Interest (OI) for Bitcoin also increased, indicating that liquidity is increasing and investors are paying more attention to the Bitcoin derivatives market. However, increased open interest also leads to volatility in the market.
With BTC’s sharp decline in the short-term, the altcoin market is also in the red, as many projects record double-digit losses.
SingularityNET (AGIX) and The Graph (GRT) are the two worst performing projects in the last 24 hours, evaporating about 19% of their value. However, on the 7-day timeframe, AGIX is still in the green with an impressive growth of up to 115%. GRT is also recording a 57% gain for the week. Other projects such as Render Token (RNDR), Axie Infinity (AXS), Curve DAO Token (CRV), The Sandbox (SAND), NEAR Protocol (NEAR), ImmutableX (IMX), Terra (LUNA), WOO Network (WOO) )… lost from 12-16% during the day.
Ethereum (ETH) also followed BTC’s plunge yesterday, losing 6% of its value. After failing to break above the $1,650 mark, ETH turned sharply lower, penetrating the $1,600 area, establishing a local bottom around $1,524 before rising slightly towards the $1,550 area at the present time.
Market sentiment has faltered as concerns begin to stymie the upside. The Greed and Fear Index (FGI) has lost its Greed zone and is currently in Neutral with 48 points.
The US stock market fell at the end of the session on Thursday (February 9), unable to keep the gains gained during the session, due to worries about the future monetary policy of the US Federal Reserve. (Fed) overwhelms excitement about the latest series of financial reports. Pressure from interest rates also caused crude oil prices to drop, ending a three-session rally.
At the close, the Dow Jones Industrial Average fell 249.13 points, or 0.73%, to 33,699.88 points. The S&P 500 index fell 0.9 percent to 4,081.5 points. The Nasdaq index slipped 1.02%, to 11,789.58 points.
All three indexes hit session lows in the last hour of the session. At the session’s peak, the Dow Jones Industrial Average rose more than 300 points, while the S&P 500 and Nasdaq rose 0.9% and 1.4%, respectively.
“Wall Street is not upbeat. Some traders are betting that the Fed will have to tighten more than what is being reflected in asset prices,” said Oanda senior analyst Edward Moya.
Alphabet shares fell more than 4% as investors worried about the growing competition facing search engine parent company Google in the field of artificial intelligence (AI). The 3% drop in shares of Meta, the parent company of the social network Facebook, put additional downward pressure on Nasdaq.
Recently, investors’ mood was dominated by comments and assessments from the Fed, in the context of the market trying to find signals about the path of interest rates in the future, after the Fed raised interest rates. rate 0.25 percentage points last week. Fed Chairman Jerome Powell said that inflation has begun to decline but the fight against inflation still has a long way to go.
In addition, Wall Street is in the middle of the fourth-quarter 2020 earnings report season. The financial statements are the basis for investors to have an in-depth look at the health of listed companies in the high inflation environment and the enterprises’ expectations about the production and business situation in the coming time.
Indices rallied at the start of the session on better-than-expected results from Walt Disney and PepsiCo, two of the companies seen as indicators of consumption. Disney shares closed down more than 1% while Pepsi gained nearly 1%.
This financial reporting season is considered by analysts to be not bad, but worse than the average in recent years. According to data from FactSet, to date, about two-thirds of the companies in the S&P 500 have released reports, of which nearly 70% have outperformed forecasts. This rate is lower than the 79% average of the previous three years, according to The Earnings Scout data.
Brent crude oil futures in London fell $0.59/barrel, or 0.7%, to $84.5/barrel. WTI oil futures in New York fell $0.41/barrel, closing at $78.06/barrel.
Since the beginning of the week, the price of both oils has increased by more than 5%. Before this session, oil prices had had three consecutive sessions of gains, partly due to market concerns that the earthquake that killed more than 20,000 people in Turkey and Syria could disrupt oil supplies.
By this session, the quake-related worries seem to have been relieved, while the downward pressure on oil has increased on the prospect that the Fed may have to raise interest rates to higher levels and stay high. for a longer time to fight inflation.
In addition, oil prices were also under downward pressure from the statistical report showing an increase in US crude inventories. Data from the US Energy Information Administration (EIA) showed that the country’s crude oil inventories rose last week to 455.1 million barrels, the highest level since June 2021. Gasoline and distillate stocks also increased.
However, the “black gold” price continued to be supported by the improvement of the oil demand outlook in China – the world’s second-largest oil consumer, which just ended its draconian Zero Covid anti-epidemic policy.
“We expect China’s oil consumption to increase by about 1 million bpd this year, with strong growth emerging around the end of January,” an ANZ bank report said. “Thanks to increased demand in China, global oil demand growth this year will reach 2.1 million bpd.”
In addition, the depreciating USD also limits the decline in oil prices. The Dollar Index, which measures the strength of the dollar against a basket of six other major currencies, fell 0.7 percent to close at 102.74 points.
The world gold price dropped sharply in the session on Thursday (February 9), when investors were “obsessed” by the worry that the US Federal Reserve (Fed) would raise interest rates to a higher level than the US Federal Reserve (Fed). with expected. Markets are also cautious ahead of the US January inflation data being released next week, as this data is an important factor influencing the path of interest rates.
At the close of trading in the New York market, spot gold price fell by 13.9 USD/oz, equivalent to more than 0.7% decrease compared to the previous session – according to data from Kitco.
This session, the gold price was supported by the decline of the USD. The Dollar Index, which measures the greenback’s strength against a basket of six other major currencies, fell 0.7 percent to close at 103.2 points. However, 10-year US Treasury yields rose, putting downward pressure on gold prices.
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