Market Wrap: Cryptocurrencies Pull Back as Traders Remain Cautious

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Bitcoin fell below $43,000 on Thursday, indicating a slowdown in buying activity.

The price of the cryptocurrency has been nearly flat over the past week, compared to a 3% drop in ether. Price movements among some altcoins have been choppy over the past week, especially for BTC, which may reflect some uncertainty among traders.

“It appears that many have been hedging and reducing exposure to cryptocurrencies in recent weeks in anticipation of [the U.S. consumer price index] Released on Wednesday, which now has to buy back,” Marcus Sotirio, an analyst at UK digital asset broker GlobalBlock, wrote in an email to CoinDesk. However, some buyers have lost business, at least in the 24 hours past.

Regulatory developments may have soured the mood among cryptocurrency traders. On Thursday, local media reported that the government of Pakistan and its central bank want to ban the use of cryptocurrencies. The introduction is the first time the central bank has taken a clear position.

At the moment, Bitcoin is stuck between the $40K support and the $44,000 resistance, according to the technical analysis.

Latest Prices

Bitcoin (BTC): $42712, −2.69%

Ether (ETH): $3,270, −3.33%

S&P 500 daily close: $4,659, −1.42%

Gold: $1,821 per troy ounce, −0.32%

Daily close of 10-year Treasury yield: 1.71%

Bitcoin, Ether and Gold prices are taken around 4pm New York time. Bitcoin is the CoinDesk Bitcoin (XBX) price index; Ether is the CoinDesk Ether (ETX) price index; Gold is the Comex spot price. Information about CoinDesk indices can be found at coindesk.com/indices.

Mixed feelings among options traders

The Bitcoin options market has a roughly 70% probability that BTC will trade above $35,000 in March, according to crypto data provider Skew. This expectation is in line with the current range of technical support around the $40,000 price level, as long as buyers are able to maintain the momentum in the short term.

Sentiment among options traders appears to be mixed, based on recent order positions.

“A sharp options player who bought 42,000 BTC calls for January started taking profits on those around the $44,000 BTC spot level, naturally creating some resistance there,” cryptocurrency exchange QCP Capital wrote in a Telegram announcement.

“We believe that options activity will increasingly determine immediate movements as the options market continues to grow,” QCP wrote.

The company also noticed a breakout in the front end of the BTC option volatility curve, which was not consistent with the recent price bounce. For now, the drop in volatility suggests that volatile price action can continue, especially given the macroeconomic uncertainty this year, according to QCP.

Bitcoin Implied Volatility (skew)

See bitcoin financing rates

Analysts also monitor the average bitcoin funding rate, or the cost of holding long positions in perpetual futures contracts listed on major exchanges. Funding rates can indicate the level of conviction among traders who are positioned to the upside or downside in price.

“When funding rates are positive (green), traders pay a premium to the counterparty to take the sell side of the trade. When funding rates are negative (red), traders pay the counterparty a premium,” Shaun Farrell, Head of Digital Asset Strategy at FundStrat, wrote in a report. On taking the long side of the trade.

If the current negative reading continues for a few more days, it could indicate that bitcoin sellers will start to exit positions, according to Farrell.

Bitcoin (Glassnode) Funding Rates

Tour around Altcoin

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Most of the digital assets on CoinDesk finished 20 lower today.

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Biggest loser:

Sector rankings are provided via Digital Asset Classification Standard (DACS)Developed by CoinDesk Indices to provide a reliable, comprehensive and standardized rating system for digital assets. the Queen desk 20 It is a ranking of the largest digital assets by volume on trusted exchanges.

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