The bearish sentiment on Bitcoin is weakening and it is on recovery mode. Bitcoin rose by 6% compared to the 7% rise in Ether. The gains are attributable to traders choosing to buy on price dips.
An analyst at FxPro felt that if the sell-off was to come to an end, the rally in BTC would lead to a greater rise leading it to touch new highs. This would happen if the bulls locked in their profits, and then bought during the dip.
However, BTC is still below its 50-day average – at around $60K. This has provided resistance to BTC’s rise over the last 10 days and if the breakout fails it would signal the end of BTC’s bullish run.
Many analysts believe that the crypto volatility will persist. They base this expectation on the fact that BTC and S&P 500 are still strongly correlated. This implies a higher potential for gains and limited downsides. QCP Capital expects the market to consolidate, prompting them to short in BTC and ETH.
BTC and ETH’s current 30-day volatility on an annualized basis can still be considered low in comparison to what it was earlier in the year. Analysts expect the volatility to be higher next year. Currently, the pullback on cryptocurrencies and stocks is limited.
BTC fell 20% from its previous high of $69,000. This was the largest fall since September. However, despite the market pullback fund inflow in crypto increased to $306 million. BTC funds witnessed inflows of $247 million. Fund inflows were also experienced in multi-asset products and funds which are oriented towards alternative cryptocurrencies.