The global cryptocurrency market cap fell sharply towards the end of the week, following a market-wide sell-off in the past four weeks that has put a dent in the micro-price performance metrics of Bitcoin and Ethereum.
Last week, Bitcoin dropped to as low as $28,000 before recovering this week as it continues to hold above $30k.
After losing pivotal support at $1,900 last week, Ether embarked on an unusual sell-off losing nearly double what Bitcoin lost. According to Coinglass, Ether tracked futures had lost over $237 million compared to those of Bitcoin futures at roughly $125 million a few hours before close.
On Friday, Ether dropped as low as $1,705 losing about 10% over the past day and coming into ranges last seen in March 2021. On Wednesday, Santiment stated that dwindling demand for the crypto asset as well as mounting fear were the main reasons for Ether’s sharp plunge. This could be tracked to dropping Ethereum gas fees in the last week to 26.3 Gwei.
“We could even notice they’ve been that low before previous bottoms,” Santiment wrote. “ Low fees mean very little activity, no one is interested in doing anything…(this hibernation) happens typically in winter. Bears sleeping in winter, waiting for a trigger.”
However, with the drop, massive rejection spikes have been recorded with Ethereum’s dip on Thursday being succeeded by a sudden surge in open interest. These two metrics signal formidable demand on the downside.
In the past 2 days, both Bitcoin and Ethereum networks have indicated a dramatically high ratio of profit vs ratio transactions. According to Santiment, this is expected after a drawdown that has lasted over six months and indicates that “loss trades are compounding and weak hands are exiting.”
That said, while it remains difficult to pinpoint a bottom now, some experts believe the crypto lackluster could persist, albeit sideways especially after the top two cryptocurrencies broke critical supports. Earlier last week, Glassnode wrote that “markets have entered a period of consolidation” with prices expected to hover in the $31,300-$28,000 range.
As of writing, Bitcoin has recovered to $30,201 while Ethereum is trading at $1,794.