Bitcoin Stabilizes as Sentiment Improves

Bitcoin and other cryptocurrencies showed little change on Monday, following a climb to two-week highs over the weekend. While sentiment has improved, prices remain vulnerable at these levels ahead of a potentially volatile week.

Bitcoin's Price Movement

Over the past 24 hours, the price of Bitcoin has fallen by less than 1% to $42,250, which marks a two-week high. This comes after the cryptocurrency consolidated above the psychologically significant $40,000 level last Friday and continued to rise over the weekend. However, it is important to note that Bitcoin is still far from its recent peak above $48,000, which was reached during the trading frenzy surrounding the approval of U.S. spot Bitcoin exchange-traded funds (ETFs) earlier this year.

According to Alex Kuptsikevich, an analyst at broker FxPro, Bitcoin has stabilized near the $42,000 mark for the past three days. Kuptsikevich points out that the 50-day moving average at $42,800 has acted as local resistance for short-term gains. He also highlights that this moving average recently changed direction from rising to falling, which could be seen as an additional short-term negative factor.

Uncertain Outlook

Although sentiment has improved, with the Crypto Fear and Greed Index rising to 55 from levels below 50 last week (with a reading above 50 indicating greed or bullish sentiment), Bitcoin may still face vulnerability at its current levels.

Kuptsikevich speculates that the current calmness could be a local trap for bulls, and anticipates a decline after a brief pause. He suggests that volatility in equities leading up to corporate earnings announcements, as well as the results of both the Federal Reserve meeting and the upcoming employment report, could trigger this decline.

Other Influencing Factors

Bitcoin will also be influenced by major non-crypto catalysts in the coming days, which could have an impact similar to that of the Dow Jones Industrial Average and the S&P 500. Catalysts include quarterly results from major tech companies, such as Alphabet, Microsoft, Amazon, and Apple, as well as the latest monetary policy decision from the Federal Reserve and the U.S. jobs report.

In addition to Bitcoin, other cryptocurrencies also saw minor changes. Ether, the second-largest crypto, experienced a less than 1% decline to $2,270. Smaller tokens, known as altcoins, showed a downward trend, with Cardano and Polygon each down 2%. Memecoins had mixed results, with Dogecoin climbing 1% while Shiba Inu dropped 1%.