Bitcoin and Ethereum lead the pack in retracing lower but remain well above their pre-rally levels. Unfortunately, Bitcoin appears to be dancing on a precarious ice floe as February falls short of replicating the successes of January.
After soaring to multimonth highs early in February, Bitcoin has been met with a newly bearish attitude. Unfortunately, those predicting a major BTC price downfall may be proven right, as the currency’s value is now hovering below $23,000 and making new lows on hourly timeframes.
As the US dollar gains strength, despite European and American markets yet to begin trading on Feb. 6, Asian exchanges have already commenced their decline- creating a possible barrier that Bitcoin bulls must overcome.
Ethereum isn’t faring much better and has been down around 5% in the past 24 hours. Its market cap of about $241 billion less than Bitcoin’s has put it out of range for a quick recovery, which has been seen over the past couple of weeks, with Ethereum prices dropping as low as starts the second week of February in a newly bearish mood as multimonth highs fail to hold.
For those anticipating a noteworthy BTC plunge, their prediction could be coming to fruition as the pair of BTC/USD is presently below $23,000 and forming lower lows on hourly intervals.
At press time, the combined market capitalization of all cryptocurrencies stands at roughly $1 trillion—down from around $1.2 trillion since Feb. 5 but still substantially higher than the pre-rally levels in late December and early January.
BTC/USD Technical Analysis
Bitcoin is trading at $22,913.42 after hitting a monthly high of above $24,000.Bitcoin has been correcting lower since then, hitting a low of $22,734.48 on Feb. 6, and is now hovering around the $23,000 mark. The hourly MACD shows an increasing bearish trendline, with the histogram in negative territory and RSI levels dipping below 50 after reaching nearly 70 earlier this week.
The pair has formed two consecutive lower highs at $24,190 (Feb. 4) and $23,530 (Feb. 5), suggesting that the bearish sentiment is gaining momentum.
The overall outlook for BTC/USD remains bullish as long as the price holds above the support of $20,000. However, a break below this level could trigger further declines to $18,000 or lower in the coming days.
Ethereum Price Analysis
Ethereum is trading at $1,634.69, down by over 0.95% in the last 24 hours. However, ETH is gaining momentum in the previous hour and could soon reach $1,650.
The hourly MACD shows an increasing bearish trendline, with the histogram in negative territory and RSI levels dipping below 50 after reaching nearly 70 earlier this week. In addition, the pair has formed two consecutive lower highs at $1750 (Feb. 4) and $1660 (Feb. 5), suggesting that the bearish sentiment is gaining momentum.
The overall outlook for ETH/USD remains bullish as long as the price holds above $1,600. However, a break below this level could trigger further declines to $1450 or lower in the coming days.
Altcoins are also experiencing a minor correction, with a few coins like XRP and Litecoin taking more serious hits. However, most altcoins remain up significantly compared to their pre-rally levels.
Most cryptocurrencies are undergoing a much-needed retracement and have remained resilient despite the recent correction.
Altcoins are also taking a breather after a significant upswing during the first weeks of February. SingularityNET AGIX has gained by over 42%, while the worst-performed altcoin is Fantom FTM, which had seen a considerable price surge over the last few days but is now back to its pre-rally levels.
The crypto market is in a consolidation phase, and investors should remain patient, as the current pullback could present good entry points for long-term holders. Although a significant correction is still possible, cryptocurrencies have weathered the early part of 2023 very well and remain on course to establish new all-time highs this year.
