Since the year started, Ethereum appears to be in hot pursuit of a new all-time high as bitcoin continues to trade sideways. For the last week, bitcoin seems to be trading in a tight range with a notable pennant pattern.
Although the price has now moved above the 20-day moving average, it seems like the bulls and bears are fighting relentlessly over the direction that bitcoin will take in the short-term.
Data acquired from TradingView show that BTC traded within a range between $34,955 and $37,850 over the weekend. However, the traders appear to be buying every dip but they are doing that with less bullish conviction.
Nikolaos Panigirtzoglou, a JPMorgan researcher, recently insisted on the importance of bitcoin breaking out back above $40,000 soon. The flagship crypto should rise to that level to avoid getting hurt by a mass exodus of “trend-following” investors who may worsen last week’s correction.
According to the Head of Trading at Wirex, Yves Renno, bitcoin is getting into a “consolidation above the $35,500 level”. However, he sees a generally positive trend in the market.
Renno believes that the most recent correction towards $30,000 was considered to be a buying opportunity for the large and institutional-size investors. That could be the case given the increase in the number of bitcoin whales and a ‘low to average’ miner supply.
The Wirex executive believes that investors should expect to see a continuous period of high volatility with a positive medium-trend in the coming weeks and months according to the action in the derivatives markets. He commented:
“The open interest is always hitting new ATHs, which makes the market even riskier since it implies that there is a higher risk of liquidation during a correction, meaning collateral sold, which typically amplifies the corrections.”
Ether (ETH) also seems to show growing strength in its price momentum. The surge in ETH could be driven by the Ethereum 2.0 launch and the upcoming CME futures launch in February. Ethereum 2.0 is also expected to offer a boost to the decentralized finance (DeFi) sector generally as the entire ecosystem will benefit from a drop in transaction fees and less congestion.
Positive News From The Regulatory Front
Reports that the incoming US president Joe Biden wants to appoint Gary Gensler as the Chairman of the United States Securities and Exchange Commission offered some reprieve for the crypto market. That created some short-term boost in sentiment. Gensler is a professor who has taught a cryptocurrency and blockchain course at MIT.
Bitcoin also got a considerable vote-of-confidence from the former prime minister of Canada, Stephen Harper. He said that there may be a designated place for bitcoin as part of “a basket of reserve currencies to replace the dollar.”
While bitcoin has been trading sideways in recent days, crypto analysts and commentators have been calling for Ether to breakout and follow in bitcoin’s parabolic movement. In the past several hours, Ether has managed a bullish breakout in its BTC pair and USD pair. At the time of publishing, ETH is up by 13%, and it is trading around $1,380.
Despite the pullback on January 18, Polkadot (DOT) also continues to be among the top-performing altcoins, enjoying a 75% increase in the past week and surpassing XRP as it sets its sight on the $20 level. At the moment, DOT trades around $17.30.
The general crypto market capitalization now stands at $1.05 trillion, and bitcoin’s dominance rate is 65.7%.