NEWSLETTER
This week could mark a pivotal moment in the first quarter of 2024 for the entire crypto market and the two largest cryptocurrencies, bitcoin (btc) and ethereum (eth), as major central banks, led by the Bank of Japan and the Federal Reserve of the US (Fed), prepare to announce your interest rate decisions.
According to cryptocurrency futures exchange Blofin, these announcements will set the tone for monetary policy in the coming months. The impact of safe haven sentiment has led to a pullback in btc and eth prices, with traders expressing increased optimism for btc.
bitcoin Price Movement Range Projected at 9.78%
According to a recent on-chain analysis report Posted by the exchange, cryptocurrency traders expect btc's price movement range to reach 9.78% over the next seven days, with a projected 30-day range of 20.33%.
However, despite the expected volatility, the report indicates that traders remain bullish on btc in the medium and long term.
Asymmetry analysis suggests that price declines and pullbacks are expected to induce volatility, but the duration of this round of pullbacks is expected to be relatively short. Risk aversion to macroeconomic uncertainty is considered the main trigger.
Latest Dealers' Gamma Distribution Supports btc's Expected Wide Range price fluctuations, with gamma peaks of around $65,000 and $75,000. As the quarterly sell-off approaches, the influence of market makers on btc price movement is gradually recovering, providing support during price declines but making it difficult to break above the $75,000 level.
Furthermore, on-chain data shows a decline in spot investors' enthusiasm for purchasing btc, although the number of addresses holding over 100 btc continues to increase, as seen in the chart above. The small number of addresses holding more than 1,000 btc suggests that significant holders have decided to sell at new btc highs.
Despite caution about possible price fluctuations, the hedging effect contributes to the increasing possibility of btc price stabilization, making holding btc a favorable option.
Bearish Sentiment Dominates First Month Options for ethereum
According to the report, like btc, traders expect relatively high volatility levels for eth in the near term, with projected price movement ranges of 10% in seven days and 20.32% in 30 days. However, the report suggests that traders are less optimistic about the future performance of eth compared to bitcoin.
Furthermore, Blofin finds that bearish sentiment dominates the first month options, while bullish sentiment remains favorable in subsequent months. Blofin highlights that expectations of rate cuts may support the eth pricebut ethereum tail risk price indicates “increased pessimism” regarding major events affecting the price of eth, with ethereum spot ETFs seen as a possible trigger.
Finally, Blofin explains that the high leverage of altcoins has long been a “source of risk” in the cryptocurrency market. The recent price decline has led to the liquidation of many highly leveraged altcoin positions, resulting in lower annualized funding rates for perpetual contracts.
This deleveraging of alternative currencies, along with its relatively small market share of less than 20%, has helped mitigate risk and contribute to market stability, according to the report. However, despite the overall decline in altcoin leverage, speculation in meme coins continues.
Currently, the price of bitcoin stands at $62,500, reflecting a significant drop of 7.5% in the last 24 hours. Similarly, ethereum is trading at $3,276, experiencing a 6.8% drop over the same period.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
