Bitcoin, Ethereum, Dogecoin Regain Some Composure — Why This Analyst Thinks This Crash Is Not Like The Ones That Came Before It

Major coins regained some upwards momentum Sunday evening after plunging brutally over the weekend. The global cryptocurrency market traded 4.1% higher at $1.8 trillion at press time over 24 hours.

What Happened: Bitcoin BTC/USD, the apex cryptocurrency, traded 0.9% higher at $35,915.82 over 24 hours. For the week, it has dived 16.2%.

Ethereum ETH/USD traded 2.2% higher over 24 hours at $2,501.82 over 24 hours. Over a seven-day period, it has plunged 24.8%.

Meme cryptocurrency Dogecoin DOGE/USD was up 3.3% at $0.14 over 24 hours. For the week, it has fallen 20.6%.

DOGE-rival Shiba Inu (SHIB) was up 3.4% at $0.00002 over 24 hours. Over a seven-day time frame, it has declined 26.8%.

The top three gainers over 24 hours were Cosmos (ATOM), Loopring (LRC), and Osmosis (OSMO), according to CoinGecko data.

ATOM spiked 13.3% at $34.43, LRC jumped 12% to $0.85, and OSMO was up 10.1% at $8.70 in the period.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: This week the focus returns to the Federal Reserve ahead of the Federal Open Market Committee meeting scheduled for Jan. 25 and 26.

The fall in Bitcoin came as cryptocurrency traders derisked portfolios following “the bloodbath” seen in stocks on Friday and ahead of the FOMC policy meeting, according to Edward Moya, a senior analyst at OANDA.

Moya pitched $30,000 as the level at which the apex coin may find support. Cryptocurrency analyst Benjamin Cowen also gave a similar reading of the situation.

“Clearly $30,000 is a big area as well. I don’t want to say there’s necessarily an absolute floor, because if you do, and it goes below it, then you have to make a new floor,” Cowen said.

The “Crypto Fear & Greed Index” by Alternative flashed “Extreme Fear” at press time. A value of 0 on the index implies Extreme Fear while a value of 100 signals Extreme Greed. At press time, the index stood at 13.

Pseudonymous cryptocurrency investor Kaleo said on Twitter Sunday that the current dip in cryptocurrency valuations is unlike prior downturns.

I know a lot of you still aren’t believers in cycles, but unfortunately I really don’t think this is one of those dips where we’ll quickly reclaim highs within the next few months.

The conditions are different from last summer. Momentum has shifted.

— K A L E O (@CryptoKaleo) January 22, 2022

Cryptocurrency trader Lark Davis pointed to the Relative Strength Index (RSI) in a tweet on Sunday. RSI is a measure of the speed and magnitude of directional price movements. 

An RSI value of 70 or above indicates the asset is overbought or overvalued, while a low RSI indicates oversold or undervalued conditions.

The last time the RSI was this low for #bitcoin was during the Covid crash... pic.twitter.com/F4DQ8xsDC1

— Lark Davis (@TheCryptoLark) January 24, 2022

Meanwhile, Ethereum’s network value to transactions ratio (NVT Ratio) —  touched a month low of 1.677.533 on Sunday, according to Glassnode data. A low NVT indicates an undervalued network worth and is perceived to be a bullish signal.

Ethereum's Network Value To Transactions Ratio (7-day Moving Average), Courtesy: Glassnode