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Bitcoin at a critical juncture, Ethereum heads lower, Polygon soars
Bitcoin at a critical juncture, Ethereum heads lower, Polygon soars
Proactive Investors - Bitcoin (BTC) is just about managing to hang on to US$23,000 this Friday morning, in what could be a critical test for the benchmark cryptocurrency.
Breaking below this key psychological barrier would produce around 3.5% of losses over three trading sessions, but it perhaps wouldn’t be a shock given the rate of growth BTC has enjoyed against the dollar in recent weeks.
Short-term dollar strength is part of the equation, but an overbought scenario should also be taken into consideration.
On the plus side, US equities remain buoyant, which could encourage further risk-on sentiment for volatile assets like bitcoin.
Bitcoin (BTC) remains comfortably above pre-FTX crash levels – Source: currency.com
Volatility should be expected on the BTC/USDT pair for a while still, given the uncertainty surrounding the Federal Reserve’s bias heading into the year’s first interest rate decision on the first of February.
A dovish 25 bps hike would likely see more money poured into riskier assets including bitcoin, whereas a heftier 50 bps hike could see bitcoin either plateau at or below US$23,000, or potentially dive lower.
Ethereum (ETH) fell below US$1,600 overnight and has continued to dive another 1.4% to US$1,580 this morning.
Further downside on the ETH/USDT pair could result in a drawdown to US$1,480 before buyers are willing to step in.
In the altcoin space
Polygon (MATIC) pulled ahead from the top-tier altcoin pack by adding 13% on Thursday, though this morning saw the MATIC/USDT pair cut back around 4% due to the wider market’s performance.
Polygon’s performance coincides with an uptick in activity on the network, which serves as a scaling solution for Ethereum. In fact, at the time of writing, Polygon had more daily active users (DAUs) than Ethereum (although Ethereum far exceeds Polygon in terms of actual trading volumes and the second overall behind Binance’s BNB Chain.
Polygon (MATIC)’s DAU count heads over Ethereum – Source: tokenterminal.com
Somewhat surprisingly, another Ethereum scaling solution, Optimism (OP) was the day’s biggest loser, having dipped nearly 9% overnight.
Some other top daily risers in the altcoin space include Theta Network (THETA), Fantom (FTM) and Chainlink (LINK), all of which added mid-single digits to their respective market capitalisations in the past 24 hours.
Global cryptocurrency market capitalisation currently stands at US$1.05tn, while total volumes locked across all decentralised finance (DeFi) protocols is US$47.4bn.
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