For the past several weeks, we continued to see the cryptocurrency market trade sideways. The good news is that the bearish momentum is slowing down as Bitcoin and Ethereum prices are finding support and managing to hold above it. Like yesterday, when cryptocurrency markets continued to trade sideways, the trend continues today. The trading volume remains relatively high, and prices remain stable. Let’s look at relevant news affecting crypto markets today.
Today’s fear and greed index for cryptocurrency is at 23 points. This means the market is still in extreme fear but in better conditions than last week when the index was at 20 points.
Looking at the Bitcoin price analysis from The VR Soldier:
“After Bitcoin found temporal support at the $18,000 level in June, it formed a higher high and higher low pattern to reach the $25,200 level – an exhaustion point – before falling back to the mentioned support in September.”
Some critical support levels for BTC are the $18k and $19k levels, which the crypto asset has held for several months.
While the price of Bitcoin may struggle to hold above the $20k support, the good news is that the $18-19k resistance levels are extremely strong, and the sideways trading market could provide an opportunity for BTC to build momentum before a bull run.
One reason for today’s slow movements in cryptocurrency markets is UK inflation data. According to AP News, UK inflation accelerates to a 40-year high.
According to the report:
“While the jump in food costs took the biggest bite out of household budgets in Britain last month, prices are rising across the board. Transportation costs jumped 10.9%, furniture and household goods rose 10.8%, and clothing was up 8.4%. Housing costs rose 9.3%, driven by the rising price of energy.”
The rise of inflation globally suggests that crypto markets are still a ways away from a trend reversal. Since cryptocurrencies are global, the state of the global economy affects crypto prices and will likely cause additional bearish pressure in the coming weeks.
In other news, Ethereum is dealing with censorship issues, where a disagreement on handling bad actors’ transactions and millions of dollars in stolen funds could force the chain to fork.
According to a report from Coindesk:
“Ethereum may soon split into two, according to some developers. As the second-largest blockchain network vies for mainstream acceptance, it has increasingly fallen under the microscope of governments and regulators eager to tame the platform.”
Forks are rarely beneficial to the original network, as they are dividing in the community, causing a dilution of investors, miners, and supporters.
Censorship has always been a significant area of debate for blockchain projects and cryptocurrencies, as different people have varying opinions on the level of control a blockchain and its developers should have over transactions.
For example, Binance has a decent amount of control in freezing accounts via their exchange and can work with validators to blacklist addresses. However, Ethereum doesn’t yet have a system in place to blacklist addresses and doesn’t have an effective strategy to combat hackers and exploiters who’ve amassed billions of dollars of stolen assets over the years.
The censorship debate is political, and we can only hope that Ethereum’s developers reach an agreement without having to fork the network.
Bitcoin is trading at $19,225, down 1% in the past 24 hours. Its market cap is at $368 billion with a 24-hour trading volume of $26 billion, down 8% in the past 24 hours.
Ethereum is trading at $1,299, down 1% in the past 24 hours. Its market cap is at $159 billion, with a 24-hour trading volume of $9.1 billion in the past 24 hours, down 6%.
The crypto market will likely continue trading sideways this week and hold support at the $19k level for BTC and at the $1,200-$1,300 level for ETH.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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Image Source: Behnam Norouzi on Unsplash // Image Effects by Colorcinch
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