Losses in cryptocurrency leaders Bitcoin and Ethereum were collectively responsible for dragging the altcoin market just before the weekend. Recent losses wiped out nearly 1 Billion from the total crypto market cap. Data collected from exchanges noted heavy profit-taking across the board, however, there was a silver lining.
Both Bitcoin and Ethereum have paced well during the second half of March, rising by 28% and 42% respectively. The two-week period was the most bullish interval both coins had since the late-January rally. However, recent losses have put both leaders on the back foot.
The abovementioned chart gave some clarity by revealing that profit-booking was the culprit for the 24-hour price decrease. Per Glassnode, more than 80% of Ethereum’s and Bitcoin’s total supply were at their highest profit levels this year, incentivizing investors to cash out.
Additionally, both coins saw massive transaction spikes at their tops. A Santiment chart showed that for the first time since November 2021, Bitcoin and Ethereum profit transactions were three times the number of loss transactions. Notably, November marked the end of Bitcoin’s bull 2021 bull run, after which a persistent downtrend took over.
2021 Bitcoin Flashbacks?
While it’s too soon to call whether or not a similar downtrend would follow, it’s important to understand that the market dynamics were different last year. Before November’s correction, both coins had been rising constantly for 4-months, and buying euphoria was at its peak following their respective new ATHs.
However, this time around, Bitcoin and Ethereum were recovering from earlier bear markets and were looking to transition to their first bull cycle for 2022.
Furthermore, after heavy overbought selling, buy trades on Bitcoin and Ethereum were beginning to rise once again on lower time frames, suggesting that correction could only be temporary.
BTC ETH Price Implications?
In terms of price, Bitcoin and Ethereum were trading close to their near-term supports of $44K and $3,200. With sell pressure easing, both coins could rebound from the said levels as early as the weekend. At the time of writing, Bitcoin traded at $44,400 and Ethereum traded at $3,279.