Bitcoin, Ethereum, Dogecoin rally stalls as Chinese data disappoints: Are investors already engaged in profit-taking?

Bearish sentiment kept major coins lower on Monday night as the global cryptocurrency market cap fell 1.05% to $1.15 trillion at press time.

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Bitcoin and Ethereum trailed stocks lower at press time as S&P 500 and Nasdaq futures turned flat and fell marginally into negative territory, squandering the day’s gains.

The mood in the stock market was marred by weak economic data from China. Industrial production came in at 3.8% in July, below the forecast of 5%. In an unexpected move, China’s central bank cut interest rates by 10 basis points.

“The economic data from China overnight was very disappointing, to say the least. Combined with the lending figures on Friday, it does not paint a good picture of domestic demand or the growth outlook,” he says. Craig Erlamsenior market analyst at OANDA.

“Bitcoin has tested the waters above $25,000 and been pushed back on the first try. It appears that the cryptocurrency, like many other instruments, is testing a potentially significant barrier after the recent recovery, and we may see some profit-taking,” wrote Erlam in a memo seen by Benzinga.

However, there is a silver lining. GlobalBlock analyst Marcus Sotiriou noted data from Bank of America indicating that consumer spending is not slowing in the United States.

“This is shown by online shopping spending remaining positive year-over-year, increases in spending on leisure services and median account balances remaining significantly higher compared to 2019.”

“However, if we look at debt payments as a percentage of personal disposable income, which is remarkably below the levels of the dot com bubble, the Global Financial Crash and 2020, we can see that consumers are in a healthy position,” Sotiriou wrote.

Investors will consider US retail sales on Friday. Minutes from the Federal Open Market Committee’s recent meeting will be released on Wednesday.

Cryptocurrency trader Justin Bennett said he is treading carefully with cryptocurrencies while tracking the dollar index, a measure of the dollar’s strength against a basket of six currencies.

Another reason I tread carefully #stock and #crypto right now is $DXY.

It reclaimed that February channel on Monday.

If this holds, expect risk assets to come under pressure. pic.twitter.com/3N6MJJfwKI

— Justin Bennett (@JustinBennettFX) 15 August 2022

The dollar index was up 0.02% at 106.57 at press time. Bennett said if it holds the 106.5 levels, he expects “risk assets to come under pressure.”

Meanwhile, Michael van de Poppe said that Bitcoin is “consolidating a bit” after a decent run in the past week amid profit-taking. He said, a “bear mindset is still key.” The cryptocurrency trader pointed to $23,800 and $23,000 as key levels to watch when it comes to longs.

#Bitcoin consolidating us a bit, as we’ve had a pretty decent uptick in the last week.

� Very normal; nothing goes up in a straight line.
� Profit taking, as the bearish mindset remains key.
� Gives people at HL opportunities to jump in.

Looking at $23.8K and $23K for longs pic.twitter.com/lfqPqMmKft

— Michaël van de Poppe (@CryptoMichNL) 15 August 2022

Bitcoin’s supply has undergone a “significant transfer of wealth in recent months,” chain analytics firm Glassnode said in a recent blog post.

While long-term holder (LTH) supply has seen a “modest decline” following the collapse of the Terra Classic (LUNC), it remains ranged.

Bitcoin’s total supply held by LTHs – Courtesy Glassnode

This points to limited spending by a subgroup rather than a broad loss of confidence, according to Glassnode.

On the other hand, short-term holders experience a difference between BTC and dollar denominated assets.

STH’s, 30-day position change — with permission from Glassnode

“This is indicative of a pool of buyers who entered at the lows and now some have [300,000 BTC]acquired at a much lower cost,” Glassnode wrote.

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