Bitcoin is trading in relatively small ranges this week. That provided some relief for market participants after the volatile crypto trading earlier this year. In the past day, bitcoin prices have tended to be flat with around 3% gains during the kick-off, compared to ethereum’s 5% gains.
However, some traders and analysts remain cautious given that the price of the cryptocurrency with the largest market cap fell below $40,000 earlier this week, if only briefly.
“The price swings are all on [small trading volume], which can amplify the price movement,” Q9 Capital, a Hong Kong-based crypto investment platform, said Friday (14/1/2022). “No new capital comes in and no one wants to sell or buy,” wrote Q9.
Attempts earlier this week to form a rebound faced more substantial selling, indicating seller pressure,” said Alex Kuptsikevich, an analyst at FxPro.
Kuptsikevich is particularly concerned about further declines for ether, the world’s second-largest crypto asset by market cap after bitcoin. If the momentum does not improve, he anticipates the worst case scenario the price will fall in the range of US$1,300-US$1,700 ETH, which is about 50% below the current price level.
However, not all assets in the crypto ecosystem experience a slowdown in trading activity, as bitcoin is experiencing.
The trading volume of non-fungible tokens (NFT) continues to soar. For example, OpenSea, a large NFT market, is on track to register more than US$6 billion in transactions by the end of the month.
Next up is dogecoin (DOGE), a dog-themed meme coin that is gaining popularity. Its price jumped nearly 14% on Friday after the boss of electric car maker Tesla, Elon Musk said Tesla would accept the crypto asset as a means of payment for the company’s merchandise. DOGE prices are up about 20% over the past week.