With major digital coins failing to break out meaningfully in recent weeks, crypto markets can’t seem to pull out of a funk.
Based on the DVAN Buying and Selling Pressure Indicator — which depicts bull/bear trends — the Bloomberg Galaxy Crypto Index appears to be stuck in a negative trend and is heading further away from the 400 level that’s previously acted as a point of resistance.
In order to breach it, the index — which tracks major cryptocurrencies — would need to see its two largest components, Ether and Bitcoin, rally, though the latter has seen difficulty in taking out its own resistance level of $10,000. The gauge could post further declines if it does not see a trend reversal.
The crypto index, more than half of which is made up of Bitcoin and Ether, was up 2.4% to 380.45 as of 11:08 a.m. in New York Monday. Bitcoin gained 1.7% to around $9,473, while Ether rose near 4%.
“I must admit, I’m surprised that Bitcoin hasn’t done much recently given some of the speculation that more central banks are looking at cryptocurrencies in general,” said Matt Maley, chief market strategist for Miller Tabak + Co. But “if it can break above $10,000 in any significant way, it’s going to take off in a moon shot. Momentum is a very important driver in the marketplace right now, so if Bitcoin, which is no stranger to momentum, can break out, it’s going to fly.”
Bitcoin, which is the world’s largest cryptocurrency, has failed to take out $10,000 following its March crash and has largely traded in tandem with riskier assets recently, selling off last week, for instance, amid wider risk-asset aversion.
A closely-watched event known as the coin’s halving, which reduced the amount of the cryptocurrency earned by so-called miners that process transactions, was initially heralded as a positive price catalyst, but it’s failed to push Bitcoin meaningfully higher over the past month.
“Bitcoin continues to consolidate in what many crypto fans are calling the typical accumulation phase that occurs after a halving event,” Edward Moya, senior market analyst at Oanda, wrote in a note dated June 19. The coin has struggled “despite an overall resilient appetite for risky assets.”