Crypto’s Unconvincing Rebound

The crypto market has recently seen a 4% increase in market capitalization within just 24 hours. However, this rise appears to be more of a volatile fluctuation rather than the beginning of a sustained recovery. Currently, the market cap sits at around $2.87 trillion, still falling short of the long-term trend line represented by the 200-day moving average, which is close to $3 trillion. The focus of market activity has reverted back to Bitcoin, which has taken a central role in the recent trends.

Bitcoin’s dominance in the cryptocurrency market exceeds 60%, a situation often observed during periods of market fear. In contrast, Ethereum's market share has dropped to 9%, marking its lowest level in almost five years. This downward trajectory in Ethereum’s share has persisted over the last two years, with only sporadic increases.

As of now, Bitcoin is hovering around the 200-day moving average, briefly surpassing it on Tuesday after dipping below $83,000. The morning trading dynamics on Wednesday signal cautious efforts to establish a market bottom. A successful move back above the 50-day moving average at around $97,000 would indicate positive momentum.

Ethereum is currently trading below $2200. Earlier in the week, it fell below $2000 during a significant downturn but has since stabilized closer to its support level as we head into early 2024. The close proximity to the lower end of its trading range makes Ethereum a key indicator for market health, and it seems to be facing significant challenges at this time.

Market Developments

In terms of market activity, there has been a notable trend in Ethereum-related Exchange Traded Funds (ETFs). On March 3rd, net outflows from these products in the US dropped to $12.1 million, continuing a negative trend for the eighth consecutive trading session. Since these ETFs were launched on July 23, total inflows have decreased to $2.81 billion.

Peter Schiff, President of Euro Pacific Capital and a known critic of Bitcoin, has called for an investigation by Congress into actions taken by US President Donald Trump regarding cryptocurrencies. Schiff suggests that Trump’s posts on the Truth Social platform, which correlated with both significant increases and sudden declines in cryptocurrency prices, could indicate a form of a pump-and-dump scheme.

Additionally, affiliates of the collapsed FTX and Alameda have made a significant withdrawal of 3.03 million SOL tokens, valued at approximately $431 million. This represents the largest withdrawal since November 2023, with the majority of these tokens sold on platforms like Binance and Coinbase at an average price of $125.8 per coin.

In summary, while the recent uptick in the market might offer some glimmers of hope, the current state of the crypto landscape suggests more volatility ahead, with challenges particularly evident among Ethereum and market participants seeking clarity.

Crypto, Market, Bitcoin