Are Bitcoin, Ethereum, Dogecoin Traders Losing Confidence? Analyst Says This Could Be The Start Of 'Good Times Returning'

Major coins traded lower Tuesday evening as the global cryptocurrency market cap fell 0.5% to $1.07 trillion at press time.

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Why It Matters: Risk assets were seen in negative territory on Tuesday evening, with two of the largest cryptocurrencies in the red. The S&P 500 and Nasdaq closed 0.7% and 0.2% lower, respectively. Their futures were largely flat at press time.

Bitcoin’s third consecutive daily decline could be an indication that “recovery momentum is waning,” wrote Craig Erlam, a senior market analyst with OANDA. 

Its movement will probably “ultimately depend on inflation,” the Federal Reserve, and any worrying news, he said.

“Perhaps the hesitancy is a sign that traders lack confidence that this is a bottom and the start of the good times returning.”

A significant piece of news that may have a bearing on Bitcoin price is the exit of Michael Saylor as CEO of MicroStrategy Incorporated MSTR — the U.S. company with the largest Bitcoin holding. 

Saylor will continue at MicroStrategy as executive chair, as he said the switch will allow him to focus on the company’s Bitcoin acquisition strategy, while company president Phong Le takes over the reins.

The company on Tuesday disclosed an impairment charge of nearly $918 million on its BTC treasury reserves during the second quarter as the price of the apex coin declined during that period. 

The visit of U.S. House of Representatives Speaker Nancy Pelosi to Taiwan is spurring risk averseness, which in turn buoyed up the dollar index, which was seen up 0.24% intraday at 106.49, at press time. 

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Cryptocurrency trader Justin Bennett said that cryptocurrency bulls will want the dollar to decline from intraday lows of 105.05 to “expose 103.” 

“Tough times for risk assets while this is intact,” said Bennett in a tweet. 

Bitcoin is testing resistance, according to chartist Ali Martinez and a “clean close” above $23,530 will allow it to retest the $24,400 supply zone. 

On the Ethereum side, transaction fees have remained “ultra-low” even as the price of the second-largest cryptocurrency rose since mid-June, said Santiment.

“Scarcer circulation has played a big role in the lower costs, and fees can be expected to remain reasonable until a fair degree of [FOMO] kicks in from the crowd,” said the market intelligence platform in a tweet.

At press time, Ethereum’s average transaction fee stood at $0.0014 or $2.28, according to data from BitInfoCharts.

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