Bitcoin and Ethereum traded lower on Monday evening as the global cryptocurrency market cap decreased 0.75% to $853 billion at 7:17 pm EST.
|Cryptocurrency||24-Hour % Change (+/-)||Price|
|Axie Infinity (AXS)||+26.3%||$8.70|
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Why It Matters: Cryptocurrencies were downbeat, while stock futures were up marginally at the time of writing as fears of rate hikes to come gripped investors.
On Monday, the ISM services report on business indicated that the services sector grew in November for the 30th month in a row. The Services PMI climbed to 56.5 in November from the previous reading of 54.4.
“Inflation will likely prove to be stickier and with the service part of the economy refusing to weaken. The risks that the Fed might need to do more remain elevated and that is why this economy needs to head to a recession,” OANDA senior market analyst Edward Moya said in a note.
“Bitcoin’s earlier gains evaporated after a hot ISM services report fueled bets that the Fed could tighten much more than markets are currently pricing. The crypto headlines haven’t been too surprising as they focus on how much money was loaned out and will likely be lost. It is fascinating to see how resilient Bitcoin has performed over the last few days, but a sustained move higher seems unlikely.”
Standard Chartered’s global Head Of Research, Eric Robertsonsaid that the apex coin could fall as low as $5,000 in 2023.
Bitcoin is undergoing a capital reset, according to Glassnode. “In the wake of one of the largest deleveraging events in digital asset history, the [Bitcoin] Realized Cap has declined such that all capital inflows since May 2021 have now been flushed out,” tweeted the on-chain analysis firm.
The deleveraging event referenced by the firm was the implosion of FTX, the cryptocurrency exchange formerly headed by Sam Bankman-Fried.
However, Glassnode noted that the “severity” of losses appears to be diminishing over recent weeks. There has also been a positive shift in both network activity and demand for block space.
Bitcoin Total Transfer Volume — Courtesy Glassnode
“This shift in structure is not however supported by rising transfer volumes, which continue to language at cycle lows, and suggests an elevated level of retail-sized participation,” said Glassnode.
Justin Bennett said despite the pullback from stocks seen on Monday, Bitcoin is “holding up well.” The cryptocurrency trader said on Twitter, “This [crypto] relief rally isn’t over.”
Michael van de Poppe said in the coming days he’d be looking out for Bitcoin testing the $16,500 level for longs. He’s also watching out for a potential “sweep of the lows” and the apex coin reclaiming the $16,900 mark.
“[For] now I’m calm and probably waiting for that [higher low] to happen before triggering positions,” said the trader.
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