Bitcoin (BTC) is currently marked by cautious sentiments as the Crypto Fear and Greed Index holds steady within the fear zone, scoring 39 out of 100 and showing a slight increase from the previous day.

This sentiment reflects the prevailing uncertainty in the cryptocurrency realm. Amidst this backdrop, Bitcoin’s price trend takes center stage, influenced by the evolving dynamics of the market.

Zooming in on the price action reveals a distinct pattern on the 4-hour timeframe. Bitcoin’s price, guided by a falling channel pattern, traces a consistent downtrend, oscillating between two parallel trendlines.

This price movement hints at the formation of a well-recognized bullish reversal pattern, known as the falling parallel channel.

At its current valuation of $25,877 according to CoinGecko, Bitcoin experienced a minor 0.6% dip in the last 24 hours and a marginal 0.3% decline over the past week.

Despite these fluctuations, the price behavior strikingly emulates the falling parallel channel, suggesting the potential for a shift in momentum.

Deciphering Bitcoin Falling Parallel Channel

The falling parallel channel is a technical pattern often observed during a downtrend. It features two parallel trendlines encompassing the price action within a defined range.

The lower trendline provides a support level, while the upper trendline acts as resistance. This pattern typically indicates a possible trend reversal, with a breakout above the upper trendline indicating an imminent bullish recovery.

For Bitcoin, a significant breakout involving a 4-hour candle closure above the upper trendline could trigger the anticipated bullish bounce. This potential surge, according to price analysis, has the capacity to propel prices upwards by approximately 8%, leading to a retest of the $28,500 resistance. 

However, prudence remains paramount as the overarching trend still displays negative undertones. Traders and cryptocurrency holders are urged to proceed cautiously at this resistance point, as the potential for sellers to regain bearish momentum persists, possibly resulting in an extended corrective phase.

Bitcoin (BTC) is currently trading at $25.928. Chart by TradingView.com

Understanding The Fear And Greed Index’s Significance

In a sentiment-driven market, the Crypto Fear and Greed Index holds substantial importance. It offers valuable insights into the collective psychological state of investors and traders, shedding light on their overall outlook.

A prolonged presence within the lower spectrum, exemplified by the current fear score of 39/100, underscores the prevailing apprehension and uncertainty among market participants. This underscores the need for judicious decision-making amidst the interplay of technical patterns and market sentiment.

The sustained position of the Crypto Fear and Greed Index within the fear zone, coupled with Bitcoin’s price dynamics marked by the falling parallel channel, underscores the intricate interplay of forces within the cryptocurrency market.

As traders closely monitor the potential breakout and its potential repercussions, exercising caution remains pivotal in navigating this intricate landscape.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from Makersplace

After an epic battle for control at the beginning of January, Bitcoin bulls managed to topple bears this week, with the price soaring past $18,000 on Dec 12 for the first time since mid-December.

At press time, the world’s largest cryptocurrency by traded volume was exchanging hands at $18,687 after a 7% increase in the past 24 hours. Earlier in the day, the price rose as high as $18,780, marking the sixth consecutive day for the asset to print a bullish candle. 

For most of the day, the crypto market remained green, with Ethereum adding roughly 6% to tap a two-month high of $1,400. On the other hand, Cardano, Solana and XRP traded mostly sideways, adding about 5% each.

Avalanche was the biggest gainer among the top 20 coins by market capitalization, adding 21.11% in the past day. On Wednesday, the network partnered with Amazon Web Services (AWS) to scale blockchain services for businesses and governments. Overall, the global crypto market cap rose by 4.78% to tap $900 Billion, marking the largest single-day push this year.

Bitcoin’s impressive ascent over the past seven days has been attributed to a return of big social dominance spikes as the asset’s plunge offers extremely discounted prices. After being kept at bay by poor market liquidity towards the end of 2022, onchain data shows that whales with 1,000 to 10,000 BTC added around 20,000 BTC to their holdings between Jan 5 and Jan 11.

Today, Glassnode noted that over 13% of the circulating supply had returned to profit, making it a significant milestone since mid-2022.

“As Bitcoin rallies to $18.2k, over 13% of the Circulating Supply has returned to profit. The observed sharp move upwards in this metric helps to confirm that a large volume of BTC was acquired between $16.5k and $18.2k,” wrote Glassnode sharing the chart below. 

On the other hand, observers have attributed Ethereum’s recovery to the impending Shanghai upgrade. The upgrade, due in March, will allow users to unstake and withdraw their Ether which has been locked into the Beacon chain since December 2020. Furthermore, the upgrade is expected to reduce centralization on Ethereum, allowing more projects to onboard and, as a result, liquidity to flow into the ecosystem.

That said, the markets seem to be pricing that in advance. 3,000 new shark addresses (holding 100 to 10,000 $ETH) have shown up on the network over the past week bringing the total number of shark addresses since Feb 2021 to 48,556. 

At the same time, onchain data showed that shark and whale addresses holding different cryptocurrencies have been accumulating Tether, the top stablecoin by market cap, as they prepare for the next bull run. According to Santiment, “There are now 21,459 addresses that hold $100k or more USDT, just 1% from a new all-time high.”

It has been one week since the conclusion of Cardano’s summit event. Several announcements were made during the blended event, with most of them centered on the ecosystem’s future. Elsewhere, after losing third place to Tether on Thursday, ADA’s market capital surpassed that of USDT this weekend, reclaiming third place. The retake was short-lived though as ADA’s market cap crumbled and has since been overtaken by Binance Chain’s utility token BNB.

Cardano ecosystem gets a boost in $100 million fund

The Cardano Summit was, for the most part, a success, and among the positives is an investment fund from blockchain firm EMURGO meant to advance the development of the ecosystem. EMURGO, which represents Cardano’s commercial arm, through its chief executive Ken Kodama pledged to inject $100 million into Cardano to accelerate growth in different areas, including DeFI and NFTs.

The global blockchain arm EMURGO revealed that the funding would entail two distinct parties EMURGO Africa and EMURGO Ventures. The two will adopt different investment approaches, but both are aimed at accelerating growth. While the former will direct its efforts towards regional startups by providing seed funding and incubation resources, the latter will concentrate on more advanced markets. A fraction of the sum will also go into educating the public on the blockchain.

Swiss crypto exchange lists Cardano (ADA) token

Last week, Cardano’s token got listed on Lykke Wallet, a Switzerland-based cryptocurrency exchange run by eponymous blockchain and financial product provider Lykke Corp. The FinTech firm, through a Twitter post, confirmed that the token would be available for trading with zero fees. The pairs available include ADA/USD, ADA/ETH, ADA/BTC ADA/GBP, ADA/EUR, and ADA/CHF.

Lykke Wallet users will, however, have to complete the Know-Your-Customer verification process before being allowed to access and trade the token for free on the platform as per the press release. The exchange stated that it would incur the deposit fee for users that send funds to their account using the bank transfer option.

The exchange’s chief executive Richard lauded the move as a significant development for the exchange’s users. He cited Cardano’s drive towards innovation as a source of inspiration for the company. Olsen also noted that the listing was the beginning of a solid collaboration to leverage the merits of blockchain and smart contracts technology. Cardano Foundation head Frederik Gregaard painted a similar image describing the listing as a massive milestone for the blockchain.

Cardano Market Performance

ADA token traded above $2.25 at the start of last week before taking a minor beating and sliding below $2.10 on September’s last two trading sessions. ADA/USD started strongly in October, gaining enough positive momentum to recuperate mid-week losses. The pair continued rallying over the weekend, recovering to the $2.20 – $2.30 range. The token is, as of writing, trading at $2.19 – down 3.77% in the last 24 hours.

Market Capital Outlook

Last month, amid several bumps in the road, ADA’s market capitalization fell by over $20 billion. The token started the month, threatening to cross the $100 billion before seeing a couple of plunges touching a September low of around $64 billion at the end of the third week.

Yesterday, ADA enjoyed trading in the green, for the most part, boasting of market capital of $73.7 billion ahead of both Binance Chain and Tether. Unable to maintain its momentum, though, it lost its spot to Binance Chain token after its [Cardano] market capital dipped to $69.9 billion. The question of the hour now is whether or not ADA can bounce back to occupy third place since BNB’s market capital figure of $70.4 billion is within touch.

 

Cardano (ADA) has been one of the most resilient coins in the crypto market. While Bitcoin has experienced a 50% correction and has revisited the yearly open, ADA has traded well above its previous lows.

At the time of writing, ADA trades at $1,14 with a 2.7% and 4.8% loss in the daily and weekly charts, respectively.

The cryptocurrency has managed to make its way into the crypto top 5 by market capitalization after Dogecoin (DOGE) and XRP lost their positions. The latter has been severely hit by the bearish trend and stands at $0,18, while XRP stands at $0,58.

At its current levels, Cardano (ADA) recorded a recent Relative Strength Index (RSI), a metric used to the price momentum of a cryptocurrency, low of 27, according to trader Eric Thies. He believes ADA was at a similar low on this metric during March 2020, before the event called “Black Thursday”.

As seen in the chart below, last time ADA was at an RSI low, it saw a parabolic increase in its price in the coming months. Thies believes this time it could be more positive, as ADA is resting on former ATHs.

In current market conditions, most coins tend to correlate with Bitcoin and its performance. Therefore, BTC’s price must continue with its recovery in order for ADA, ETH, and other cryptocurrencies to recover.

Pseudonym trader Crypto Punisher has compared the ADA/ETH trading pair and found a positive outlook for the former. Ethereum has been one of the top performer cryptocurrencies in recent months, but the trader believes Cardano (ADA) could take that place:

(…) at macro level support as ETH continues to show strength. given that ADA has held strong all throughout this downtrend I think a bounce to outperform ETH short-term is enticing enough R:R wise.

What Could Push Cardano (ADA) Into New Highs?

One of the key factors that have been affecting Cardano and its price action, it’s the upcoming roll-out of their smart contract platform, Plutus. Input-Output Global (IOG) is currently testing the update in color code phases, they have successfully completed AlonzoBlue, part one, and have into AlonzoWhite.

Plutus will be introduced in a Hard Fork Combinator by some point in late 2021. IOG’s founder and Cardano creator Charles Hoskinson made an Alonzo Update via his YouTube channels and said:

Everything is looking pretty good, looking like it’s on schedule. Application backend integration is on schedule, the wallet backend integration is on schedule. We have a working Alonzo node, it survive the blue era. Now, we are in the white era.

Hoskinson added that they are “mass onboarding people” to collaborate with the testnet and Cardano’s developer is working on the new version for the Alonzo node. As the final implementation approaches, ADA could see further benefits and push its way into uncharted territory.