Bitcoin is currently above $45,000 as of press time. It is trying to reverse a slight downtrend that has been occurring over the past week. As a result, cryptocurrencies are consolidating at near highs because of negative headlines that have kept buyers off the sidelines.
Minutes from the Federal Open Market Committee showed that the Federal Reserve may slow down its pace of asset purchase later in the year. Concerns about the fading stimulus caused a pullback of equities, commodities and also weighed on cryptocurrency.
The news of a hacker at Japan’s Liquid Global Exchange on Thursday also dampened bullish sentiment in crypto markets. The total amount of the stolen coins, including bitcoin, ripple, Tron, and ether, is not yet known. However, Eliza Gkritsi from CoinDesk reports that the theft could have been in excess of $90 million.
FundStrat said Wednesday that BTC holding the 200-day moving mean would be the first fall in a move toward a rally to the end of the year.
FundStrat is bullish about crypto and expects near-term weakness to fade, as macro conditions remain supportive of assets that are considered risky.
FundStrat stated that there is a mid-cycle trend in which active market participants move from BTC to ETH into alternative coins.
Rally Less Heated
The cost of funding long positions in the bitcoin perpetual swaps market, a type derivative in cryptocurrency markets similar in nature to futures contracts, is still relatively low in comparison to previous market rallies.
FundStrat stated that when there is a substantial increase in price, we often see concurrent runs-ups in funding rates as investors chase long positions. The chart below shows that, while funding rates are generally positive, they are not overheated in comparison to recent price action.
“cryptocurrencies flew once again this month as investors’ appetites to high risk pushed prices higher,” Lukas Ezersdorfer Konrad, chief product officer of crypto exchange Bitpanda wrote in an email sent to CoinDesk.
Altcoins have outperformed bitcoin over the past week, but bitcoin has been in decline. According to CoinDesk price data, Cardano, XRP, and dogecoin saw gains of over 40% while bitcoin experienced a nearly 7% increase.
Altcoins’ performance could continue, particularly considering the recent technical breakthrough in ether relative bitcoin.
Altcoins are riskier than Bitcoin, so rising ETH/BTC pairs could indicate a greater appetite to take on risk in the crypto market. Enzersdorfer Konrad wrote.