Bitcoin and Ethereum traded lower on Monday evening as the global cryptocurrency market capitalization fell 0.75% to $853 billion as of 7:17 p.m. EST.
|Piece of money||24 hours||7 days||Price|
|Cryptocurrency||% change over 24 hours (+/-)||Price|
|Axie Infinity (AXS)||+26.3%||$8.70|
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Why is this important: Cryptocurrencies were bearish, while equity futures were up slightly at the time of writing as fears of upcoming rate hikes gripped investors.
On Monday, the ISM services business report showed that the services sector grew in November for the 30th consecutive month. The services PMI climbed to 56.5 in November from the previous reading of 54.4.
“Inflation will likely prove more rigid and the services portion of the economy will refuse to weaken. “Risks that the Fed will need to do more remain high and that is why this economy must be heading into a recession” , said OANDA’s senior market analyst. Edouard Moya said in a note.
“Bitcoin’s earlier gains evaporated after a hot ISM services report fueled bets that the Fed could tighten significantly more than markets currently expect. The crypto headlines haven’t been too surprising as they focus on how much money has been loaned out and is likely to be lost. It’s fascinating how bitcoin has held up over the past few days, but a sustained move higher seems unlikely.
Standard Chartered Global Head of Research, Eric Robertsonsaid the centerpiece could drop to $5,000 in 2023.
Bitcoin is undergoing a capital reset, according to Glassnode. “Following one of the biggest deleveraging events in digital asset history, the [Bitcoin] The realized cap has shrunk such that all capital inflows since May 2021 have now been evacuated,” the on-chain analytics firm tweeted.
The deleveraging event the company is referring to was the implosion of FTX, the cryptocurrency exchange formerly run by Sam Bankman-Fried.
However, Glassnode noted that the “severity” of the losses appears to be diminishing over the past few weeks. There has also been a positive change in network activity and block space demand.
Total Bitcoin Transfer Volume — Courtesy of Glassnode
“This structural change is not, however, supported by rising transfer volumes, which continue to languish at cycle lows, and suggest a high level of retail-size participation,” Glassnode said.
Justin Bennett said that despite the pullback in stocks seen on Monday, Bitcoin is “holding up well.” The cryptocurrency trader said on Twitter: “This [crypto] the relief rally is not over.
Michael van de Poppe said in the coming days that he would be looking for Bitcoin to test the $16,500 level for a long time. It is also watching for a possible “dip sweep” and the centerpiece reclaiming the $16,900 mark.
“[For] now i’m calm and i’m probably waiting for this [higher low] occur before triggering positions,” the trader said.
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