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In the past few weeks, after significant price fluctuations, both Bitcoin (BTC) and Ethereum (ETH) have experienced a period of stagnation in price movements. Indeed, Bitcoin trading has calmed significantly this week, with transaction volumes dropping from 70% to 50%, reducing volatility. Is this the calm before the storm?
What Awaits Bitcoin and Ethereum?
When a market consolidates, many traders prefer to accumulate long positions. However, despite this trend, most traders have decided to be bearish when it comes to BTC and ETH.
For Bitcoin, the percentage of short positions taken against BTC increased from 49% to 54% in the last 24 hours. However, there might be a potential bright spot on the horizon next week.
The launch of Hong Kong-based spot ETFs for both BTC and ETH could serve as a gateway for institutional capital inflows from Asia.
This situation could turn in favor of both BTC and ETH, potentially reducing the bearish trend surrounding these two cryptocurrencies.
BTC and ETH Show Correlation
In the past few weeks, the flagship cryptocurrency BTC and the leader of the altcoin world, ETH, have shown significant price correlation. Both cryptocurrencies have seen some corrections in the last few days, contributing to the bearish sentiment surrounding these currencies. Additionally, the trading speed of both cryptocurrencies has recently decreased.
Simply put, the trading frequency of BTC and ETH has dropped in the charts. Lastly, the MVRV ratio for both BTC and ETH has risen, indicating that most addresses holding these coins are relatively profitable. Also, the long/short position difference for these coins has increased. This indicates an increase in the number of long-term holders of BTC.
As of writing this article, the cryptocurrency Bitcoin is trading at a price of $63,340. The price of the cryptocurrency Ethereum is at $3,136. It was recently stated that the $3,200 level is a critical resistance for Ethereum.
