The global cryptocurrency market experienced mixed sentiments as total capitalization decreased by 2.36%, settling at $3.27 trillion. Trading volumes also sharply declined, falling 9.96% to $ 165.4 billion in the last 24 hours.
Fear & Greed Index Signals Cautious “Greed” Sentiment
The Fear & Greed Index currently stands at 49, indicating a “Neutral” sentiment. This marks a decline from last month’s level of 83, representing “Extreme Greed.” While greed sentiment often suggests bullish momentum, the moderation signals potential short-term corrections.
Volatility Results in $478.30 Million Liquidations
Over the past 24 hours, high market volatility led to liquidations totalling $478.30 million, affecting 164,937 traders. Here’s a breakdown:
- $338.61 million in long positions were liquidated.
- $139.69 million in short positions were liquidated.
The most significant single liquidation occurred on OKX with the BTC-USDT-SWAP pair, valued at $15.30 million.
US DOJ Sells Remaining Silk Road Bitcoin Holdings
The U.S. Department of Justice (DOJ) has liquidated 69,370 Bitcoins seized from the Silk Road darknet. Bitcoin’s high price volatility influenced the decision to sell. Following the sale, the balance in the U.S. government’s wallet fell to zero, down from $6.7 billion as of January 8, according to Arkham Intelligence.
The DXY (Dollar Index) surged to 109.37 after an initial decline of 0.92%, reflecting market concerns about inflation and economic policies under President-elect Donald Trump. Simultaneously, U.S. Treasury yields climbed, with:
- The 10-year note reached 4.7%.
- The 30-year note hitting 4.93%.
This dollar strengthening has exerted selling pressure on Bitcoin and other cryptocurrencies.
Technical Analysis: Symmetrical Triangle Signals Volatility
The price action appears to have been in a consistent uptrend through October and November, with successive higher highs and higher lows. This trend aligns with the candlesticks staying consistently above the shorter-term moving averages (20 EMA and 50 EMA) during this period. In mid-November, the total market capitalization broke significantly above the longer-term moving averages (100 EMA and 200 EMA), signaling a strong bullish momentum.
However, the current market conditions indicate a potential slowdown. The price recently retreated below the 20-day EMA, and the 50-day EMA is being tested as support. This shift signals weakening momentum in the short term. The market capitalization has dropped to approximately $3.2 trillion, with bearish daily candles reflecting selling pressure. If the 50-day EMA, currently at $3.23 trillion, fails to hold, the next support level lies near the 100-day EMA at $2.99 trillion.
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For Bitcoin, holding the critical $90,000 support level is vital for a bullish continuation. Wave analysis suggests the ongoing consolidation is part of the fourth wave, potentially leading to a rally toward the $126,000–$128,000 range.
Outlook: Will the Market Recover?
The cryptocurrency market’s recovery depends on its ability to maintain crucial support levels. Analysts are closely watching the $3.27T total market cap and Bitcoin’s $90,000 support for signs of the next significant move. If these levels hold, the market could be poised for a robust rebound.
