Crypto story

Ethereum nears new all- time high.

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It’s been a relatively quiet week for the Bitcoin price, which seems content to hover between $35,000 and $37,000 for the time being. There was a strong recovery from last week’s $30,000, but rejection at $40,000 seems to have left the market in two minds about what it wants to do next. Will we yet see another breakout this week?

All the big news at the moment is in the altcoins market. Ethereum yesterday came within touching distance of a new all-time high, breaking $1,400 for the first time since January 2018. At the time of writing, ETH is up 37% and is outpacing bitcoin. Will it go even further at the second time of asking? 

The impact of the upcoming ETH futures listing on CME is also worth keeping an eye on in the coming weeks. This will give more institutional investors access to ETH exposure. We’ve seen what institutional investors have done for Bitcoin recently, will they have the same impact for Ethereum?

Percentage change in price

Bitcoin recovered strongly from the $30,000 lows last week and once again climbed to the $40,000 level. While $40,000 was rejected quickly, it now seems like $35,000 is a new temporary floor for bitcoin. Another attempt to climb above $40,000 could be on the line this week, and a break above would be a bullish signal. However, if bitcoin prints another lower high, we expect the $35,000 floor to get tested again. A break of the $35,000 support will probably see the price fall down to the $30,000 area.

Market sentiment drops further
 

The Fear and Greed Index dipped below 80 for the first time since early November this weekend. The bitcoin market is finally slowing down a bit and looks less overheated, with the funding rates calming down. Yet, an index value of 80 is still in the “Extreme Greed” area and tells us that the market is still very bullish and optimistic.

Fear & Greed Index

Bitcoin volume topping out?
 

After a few weeks of exponential growth in the bitcoin volume, the current sideways price action has seen the volume drop again. The 7-day average real bitcoin volume is now below $10 billion, which is still very high. Yesterday, the institutional exchange LMAX Digital saw a higher daily bitcoin volume than Coinbase, showing that institutional traders are a significant part of this increasing spot volume.

BTC Daily Volume

7-day volatility tops out close to 7%
 

Last week’s very volatile start saw the 7-day volatility push all the way to 6% before cooling off this weekend. As already noted, the last days have been relatively flat, and the market is patiently waiting for bitcoin’s next move.

BTC Daily Volume

Bitcoin on-chain activity at all-time high

The number of active addresses on the Bitcoin blockchain pushed above the 2017 peak recently, as the activity on the Bitcoin blockchain has been rising steadily together with the price. The number of active addresses (7-day average) surpassed 1.24 million on 8 January, marking a new record high. The on-chain activity has dropped again over the last two weeks, and Sunday, 17 January, marked the lowest number of daily active addresses so far in 2021. While the recent surge in activity is a healthy sign for the Bitcoin network, it’s interesting to note that the number of daily transactions is actually trending downwards.

BTC Daily Volume


DISCLAIMER

The information contained in this report should not be construed as a solicitation to trade. All opinions, news, research, analysis, prices or other information is provided as general market commentary for information purposes only and is not investment advice or recommendation. Luno always advises you to obtain your own independent financial advice before investing or trading in cryptocurrency.