Bitcoin, Ethereum, Dogecoin Head Lower: Is It Time To Brace For A 'Chop Season?'

Major coins traded lower Thursday evening as the global cryptocurrency market capitalization fell 2.37% to $2.21 trillion.

What Happened: The apex cryptocurrency, Bitcoin BTC/USD, fell 2.89% to $47,811.50 over 24 hours. For the week, BTC has inched lower by 0.89%.

Ethereum ETH/USD traded 1.85% lower at $3,977.06 over 24 hours. Over a seven-day period, it has fallen 4.16%.

Meme cryptocurrency Dogecoin DOGE/USD was down 4.14% to $0.17 over 24 hours. It has risen 1.99% for the week.

DOGE-rival Shiba Inu declined 3.57% to $0.000033 over 24 hours. Over a seven-day trailing period, it has dropped 6.1%.

Yearn.finance, Celo, and Arweave were among the top gainers over 24 hours, according to CoinMarketCap data.

Yearn.finance shot up 17.3% to $24,388.51, Celo rose 9.69% to $3.85, while Arweave was up 8.95% to $45.73 in the period.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: The hawkish stance taken by the U.S. Federal Reserve on Wednesday was reinforced by the Bank of England, which raised interest rates for the first time in three years on Thursday.

The United Kingdom’s central bank increased interest rates to 0.25% from 0.1% after the rise in inflation came in at the fastest pace in a decade, reported BBC.

Giles Coghlan, the chief analyst at U.K.-based multi-regulated Forex and CFD provider HYCM, said the move by the U.K. central bank caught the markets off guard.

“Today’s decision will have been a careful balancing act for the Monetary Policy Committee, who will have been weighing a surge in inflation against a surge of new coronavirus cases – and clearly, inflation won the day,” wrote Coghlan in an emailed note.

The relief rally, seen in Bitcoin and other major cryptocurrencies, changed course on Thursday. The reversal caught the eye of some analysts. 

Amsterdam-based cryptocurrency trader Michaël van de Poppe said on Twitter the market was in a “chop” season which not only erodes gains but also the “ideas of people on the markets.”

Welcome to the chop season.

The season where all the gains of day 1 are lost on day 2 and everything flip/flops within 24 hours, also the ideas of people on the markets.

— Michaël van de Poppe (@CryptoMichNL) December 16, 2021

Cryptocurrency-oriented YouTube analyst Justin Bennett told his following on Twitter that Bitcoin “has a history of filling long lower wicks.” Bennett said he has no reason to believe it will be different this time around.

$BTC has a history of filling long lower wicks.

I have no reason to believe this time will be different.#Bitcoin pic.twitter.com/My4Wb39L5i

— Justin Bennett (@JustinBennettFX) December 16, 2021

Meanwhile, the number of whale addresses holding 100 to 1,000 BTC is on the rise. A rise in that metric is historically linked with an increase in BTC prices, noted on-chain analyst Santiment on Twitter.

#Bitcoin's number of whale addresses holding 100 to 1,000 $BTC has 193 more addresses in this prestigious club, compared to just 10 weeks ago. The number of whales in this tier has shown some strikingly impressive parallels to $BTC price, historically. https://t.co/kFzKHVqWxq pic.twitter.com/ogN0WIz7Ut

— Santiment (@santimentfeed) December 16, 2021

Cryptocurrency research firm Delphi Digital took note of the rising institutional demand for crypto assets on the trading platform of Coinbase Global Inc COIN.

Retail And Institutional Volume On Coinbase — Courtesy Delphi Digital

The first three quarters of 2021 saw 5.7x more institutional inflows to Coinbase than the entire 2020. Total volume was over $1.1 trillion in the first nine months of the year and 68% of that was generated by institutional demand. Retail volumes shrank by 7.5% in Q3.

The research firm said while long-tail assets such as Shiba Inu and Dogecoin have been “extremely popular” with Coinbase’s retail clientele and contributed 60% of Coinbase’s Q3 volume, they may become institutional sweethearts as well.

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