Bitcoin and Ethereum Start 2024 with Bullish Momentum
Bitcoin and Ethereum have begun the new year with impressive price rallies. Bitcoin broke through the key resistance level of $45,500, while Ethereum reached $2,400. Traders and the crypto community are optimistic about the approval of the first Bitcoin spot ETF in the US, which could bring institutional liquidity to the market. Short-term price targets are set at $50,000 for BTC and $3,000 for ETH. To better understand this recent surge, let’s examine indicators such as open interest, liquidations, and funding rate.
Bitcoin’s Price Action
Bitcoin’s recent price increase has brought it to a new local high not seen since April 2022. However, this surge occurred during a period of low trading volumes due to the holiday season. It is still too early to determine if the volumes will continue to support the upward momentum. The Relative Strength Index (RSI) suggests the possibility of further bullish movement but also indicates a bearish divergence.
Ethereum’s Price Action
Ethereum’s price pump has pushed it above the key level of $2,400, giving hope to traders after a brief retracement at the end of last year. However, the breakout was accompanied by low volumes. Like Bitcoin, Ethereum’s RSI signals potential for more upside but also shows a less pronounced bearish divergence compared to Bitcoin.
Derivatives Market Analysis
Examining the derivatives market can provide insights into Bitcoin and Ethereum’s price trends. Open interest on perpetuals and options has been increasing for both assets against the dollar. Bitcoin’s open interest has surpassed $12.7 billion, while Ethereum’s is at $6.5 billion. This indicates that market attention is primarily focused on Bitcoin.
The funding rate for both Bitcoin and Ethereum is positive, indicating high demand for long positions with leverage. Ether’s funding rate is the highest since September 2021, suggesting increased speculation in ETH compared to BTC. Liquidation levels have mainly affected shorts, with $75 million in short liquidations for Bitcoin and $16 million for Ethereum in the past 24 hours.
Potential Price Levels to Watch
For Ethereum, a break above $2,500 could lead to a bullish continuation with a target of $3,000. Conversely, a drop below $2,300 may trigger a downside squeeze. As for Bitcoin, breaking through the $46,000 resistance level could result in a bullish squeeze towards $50,000. On the other hand, a bearish decline below $45,000 and $42,000 could lead to a significant drop in price.
Hot Take: Bullish Start to 2024 for Bitcoin and Ethereum
Bitcoin and Ethereum have kicked off 2024 with strong price rallies and are attracting attention from traders and investors. The approval of a Bitcoin spot ETF in the US could bring significant institutional liquidity to the crypto sector. While there are concerns about low trading volumes during the holiday season, technical indicators suggest the potential for further bullish movement. The derivatives market shows increased open interest and positive funding rates, particularly for Ethereum. Traders should keep an eye on key price levels to gauge potential market movements. Overall, the outlook remains positive as we enter what could be the start of a major bull run in 2024.
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