Bitcoin Holds Steady at $24,000 as Ethereum Faces 25% Correction to $1,400 in March
- Bitcoin whale activity has dropped significantly recently, showing a lack of confidence among major investors.
- As the Ethereum Shanghai upgrade draws closer, experts are predicting a sell-off as liquidity increases. ETH technical chart shows possibility of further 25 percent correction.
After a strong start to the year 2023, the world’s largest cryptocurrency Bitcoin (BTC) has consolidated in line with the broader cryptocurrency market. Over the past week, Bitcoin (BTC) has faced strong selling pressure and is down 4 percent on the weekly charts.
As of press time, BTC is trading down 1.45 percent at a price of $23,456 and a market cap of $456 billion. The current macro indicators such as rising inflation have weighed on Bitcoin and the overall crypto market.
Several market analysts expect the Federal Reserve to continue raising interest rates going forward, leading to the possibility of an economic recession in the United States. Well, if such a scenario pans out, risk-ON assets like Bitcoin and other cryptocurrencies will be the most affected.
After the recent surge, Bitcoin has failed to move past $25,000 levels, facing stiff resistance. Mike McGlone, senior commodity strategist at Bloomberg writes:
“Don’t fight against #Fed” was the dominant headwind for the markets in 2022, and still is in the 1st quarter. Bitcoin Resistance at $25,000 could prove significant for any risk asset.
As macro headwinds remain strong, McGlone explains that the trajectory should remain downward. On the other hand, the total number of Bitcoin whale addresses has continued to decline. On-chain data provider Sentiment reports:
The amount of existing whales #Bitcoin addresses continue to decline, with 2,011 existing compared to 2,266 existing a year ago today. It was 2,489 #AllTimeHigh set to February 8, with prices jumping +70% over the following 10 weeks.
Politeness: Sentiment
Like Bitcoin, Ethereum is showing signs of weakness
The world’s second largest cryptocurrency Ethereum (ETH) has more or less moved in line with Bitcoin. Ethereum has also faced selling pressure in the past week and is currently trading at $1,645 levels with a market cap of $201 billion.
The Ethereum developers are now preparing for the launch of the Shanghai Upgrade ahead of this month. This is one of the most important network upgrades as it will unlock the ETH staked for investor withdrawal. Some market analysts believe this could put additional selling pressure on ETH as liquidity increases. However, on-chain data provider CryptoQuant has an opposite view on this. It notes:
We believe there will be little selling pressure for ETH when stake withdrawals become available after the Shanghai upgrade. This is based on our analysis of the profit and loss of the stake ETH. Two factors support the argument: 60% of the staked ETH is at a loss, and the largest stake pool’s depositors are also at a loss.
Looking at the technical chart, Ethereum could suggest another 25 percent correction from current levels. As we know, Ethereum is finding it increasingly difficult to break above the $1,650-1,700 technical resistance level. Every failed breakout at these levels in the past has resulted in a strong pullback.
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If history is any indicator, Ethereum (ETH) is likely to correct another 25 percent from today’s levels to $1,250. However, if the bulls surprise like last time, a strong breakout above $1,650-1,700 will lead to a price rally to $2,000.
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