Have the crypto markets peaked? By proactive investors

by James · March 29, 2023

Proactive Investors – Although bitcoin (BTC) initially fell to the mid-26k range on Tuesday in the wake of a regulatory scare for the world’s largest cryptocurrency exchange Binance, the benchmark cryptocurrency saw a bullish wave as the trading session progressed.

BTC/USDT actually ended up in the green at the end of the session, indicating that bitcoin’s recent remarkable resilience in the face of a tangle of external pressures may remain for some time to come.

Driving that fact home is today’s ongoing bullishness, with the BTC/USDT pair adding nearly 3% at the time of writing, successfully breaking above the 28k resistance point again.

Bitcoin looks determined to achieve a stable price range somewhere between 27k and 29k, leaving the door open for a bullish push to the psychological 30k barrier.

It could be a tough fight, especially since Binance’s order book shows overwhelming selling pressure along the way.

Bitcoin (BTC) remains strong for now – Source: currency.com

One thing seems obvious: the amount of available liquidity in the market is falling rapidly.

Market maker Keyrock explained to Reuters that the slippage – the price spread between buying and executing a trade – on Coinbase’s BTC/USD pair is 2.5 times higher than it was at the beginning of the month.

Daily bitcoin trading volumes, per CoinMarketCap data, have remained below $20 billion over the past four days, down from over $50 billion at the height of bitcoin’s super rally in mid-March.

One of the driving factors is intense regulatory pressure being applied to prominent fiat on-ramps, including Coinbase (NASDAQ:COIN) and Binance, with spooked traders wary of using the platforms for fear of another FTX-sized disaster.

Reduced trading volumes and available liquidity tend to favor volatility, which is great if you are savvy enough to play the market correctly, but they provide real headwinds to bitcoin’s currently high price.

Ethereum (ETH) ended yesterday’s session 3.7% higher at $1,770 before managing to shoot above $1,800 this morning.

Like bitcoin, ETH’s order book shows an overwhelmingly bearish threat to bets above the current price point, particularly around $1,850.

Has the rally peaked? There’s an argument to suggest that it has, especially with the safe-haven gold rush starting to cool.

A pragmatic view would see the top two cryptocurrencies flatten out for a while, if they do not pull back from their overbought positions.

Ripple will not calm down

Speaking of overbought, payment token Ripple (XRP) continues to make big daily gains, with another 7% added yesterday and again today. Week-to-week gains have exceeded 20%.

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At $0.551, XRP is close to testing the August 2022 high of $0.559. Breaking above this price point will bring XRP to price points not seen since May 2022.

XRP’s frenzied rally is on the back of speculation of a legal victory against the Securities and Exchange Commission (SEC), but it risks toppling over if investors decide to sell the news after buying the rumor for so long.

The long-running SEC dispute centered around an alleged US$1.3 billion unregistered securities offering appears poised to end, with the consensus among onlookers tipping a Ripple Labs victory.

However, there is no certainty of a victory until a declaration is made.

Global cryptocurrency market capitalization rose 3.8% to $1.18 billion overnight, while total value in decentralized finance (DeFi) rose 2.4% to $49.7 billion.