Bitcoin and Ethereum market trends: Here’s a fact check

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Bitcoin and Ethereum are approaching their worst weekly candle closes since 2021. When the losses from the previous week are added up, the losses are tragic, causing a huge sense of panic in the industry. BTC and ETH were also down by 46% and 53%, respectively. As a result, the argument for a broken bull cycle is getting more compelling.

This essay examines a few fundamentals in order to forecast the near-term future of these two crypto properties.

At the moment, Bitcoin and Ethereum do not have structural market influence. Both properties have never occupied positions higher than their supports. The chart shows the possible degree of sell-off right now, as they are slipping strongly towards their low from May 19th.

During the latest bull market, average exchange inflows have been modest. The last time mean currency inflows increased sharply was after the March 2020 price crash. It can be seen before that in November 2019. At press time, a comparable amount of inflows was caused, which may mean aggressive selling demand. The sell-off can be seen as a justification for market supports to be deemed invalid. Since Bitcoin is strongly pushing the mood, the Altcoin markets are still seeing a downturn.

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Ethereum-Bitcoin Realized Volatility

Source: Skew

For the majority of 2021, the realised instability of ETH in relation to BTC has favoured Altcoins. An unnecessary extension in the above table, on the other hand, is cause for concern.

Realized volatility is the volatility of an asset seen by buyers over a given time frame, and it is influenced by nett purchasing demand for options and historical price volatility. The disparity, or spread, between the realised volatilities of the two crypto assets is the emphasis in this situation. It introduces a significant caveat since uncertainty is now widespread in a bear market. It is possible that the drawdown will be much more damaging if purchasing pressure does not increase.


Speaking of buying pressure, the reserve is right there!

Source: CryptoQuant

Although Bitcoin inflows may be rising, the above map provides one point of comparison about where they may be heading. The stablecoin deposits on exchanges hit a record high, showing that people prefered to retain their money on exchanges rather than liquidate it for cash.

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This is a good sign that selling pressure will gradually wear off. The fact that stablecoin deposits are increasing on exchanges suggests that traders’ mood is still optimistic, as the game of patience is currently in play.


Taking it one week at a time?

Two weeks in a bearish market will come to an end in a matter of hours. Although it can differ by a third, the last time three weeks of corrections were found was in March 2020. Given that we are not currently facing a black swan case, traders may expect a significant recovery in the coming days. However, resuming full-fledged bullishness might take some time, but Diamond Hands may become the next trending word on Twitter.

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