By Omkar Godbole (All times Eastern unless otherwise noted)
Bitcoin’s The bear market feels brutal and may deepen. Analysts say the Fed may need to cut interest rates and break cryptocurrency-specific regulations to turn the tide.
But beneath the surface, something as simple as two behavioral biases may play a key role: anchoring bias and regret aversion.
Last year’s bull market didn’t feel like a bull market. There was no wild retail and institutional stampede of 2020-21 or 2017. Spot ETFs took in billions of dollars, but mostly as a result of arbitrage bets rather than outright bullishness. This may be due to anchoring bias, a mental shortcut in which people focus on one piece of information, such as a reference price, and distort their value judgments.
Investors could have been swayed by Bitcoin’s price of $100,000 and then balked: “That’s much higher than the typical tech stock, even the Nasdaq isn’t trading at that high; it must be overpriced.” In other words, they could have used familiar benchmarks as a basis, decided that BTC was too costly, and sat on the sidelines.
Fast forward to today: Bitcoin is trading at $76,000, well below its peak. If the price falls below $60,000 (a 50% discount from October’s highs), last year’s position holders will have good reason to buy in large quantities. This is regret aversion: the fear of missing out on future gains if you exit, which drives aggressive bargain hunting in assets with proven upward trajectories.
While behavioral biases provide a compelling theory for a rapid economic rebound, macroeconomic influences and regulatory developments are likely to play a dominant role.
Currently, the cryptocurrency market has stabilized, with Bitcoin rebounding from an overnight low of $73,000 to $76,000 as technical indicators issued oversold signals. ether Solana and ripple Also up, but overshadowed by Monero’s sharp rise WLFI and other smaller tokens.
Tagus Capital said on-chain data shows that profit-taking has slowed among long-term holders, or wallets that have held tokens for more than five months.
Still, the risk of further selling remains if Wall Street’s tech-heavy Nasdaq 100 index extends Monday’s selloff and U.S. Treasury yields rise further. Today’s release of key U.S. data – ADP employment data and ISM services data – could add to market volatility. Stay alert!
Read more: For analysis of today’s altcoin and derivatives activity, see Today’s Cryptocurrency Market
What to see
For a more comprehensive list of this week’s events, see CoinDesk’s “Crypto Week Ahead.”
- cryptocurrency
- Macro
- February 4, 7 a.m.: U.S. MBA 30-year mortgage rate for the week ended January 30 (previous value 6.24%)
- February 4, 10 a.m.: U.S. ISM services PMI in January (previous value 54.4)
- income (Estimate based on FactSet data)
- February 4: CME Group, pre-market, $2.74
Token event
For a more comprehensive list of this week’s events, see CoinDesk’s “Crypto Week Ahead.”
- Governance votes and calls
- February 4: Stacks holds town hall meeting.
- Unlock
- Token issuance
- February 4: THORChain Solana mainnet is expected to be launched.
Meeting
For a more comprehensive list of this week’s events, see CoinDesk’s “Crypto Week Ahead.”
- Day 4 of 4: Qatar Web Summit (Doha, Qatar)
market trend
- BTC is down 0.14% to $76,051.11 since 4pm ET on Thursday (24 hours: -2.75%)
- ETH fell 0.98% to $2,607.45 (24 hours: -1.75%)
- CoinDesk 20 down 0.73% to 2,230.96 (24 hours: -1.9%)
- Ethereum CESR comprehensive pledge rate fell 17 basis points to 2.83%
- The BTC financing interest rate on Binance is 0.0028% (annualized 3.0748%)
- DXY remains unchanged at 97.53
- Gold futures rose 2.81% to $5,073.50
- Silver futures rose 7.99% to $89.96
- The Nikkei 225 closed down 0.78% at 54,293.36
- The Hang Seng Index closed unchanged at 26,847.32 points
- The FTSE rose 1% to 10,417.96
- The Euro Stoxx 50 index rose 0.21% to 6,008.14
- The Dow closed down 0.34% on Tuesday at 49,240.99 points
- The S&P 500 closed down 0.84% at 6,917.81 points
- The Nasdaq Composite Index closed down 1.43% at 23,255.19 points
- The S&P/TSX Composite Index closed up 0.64% at 32,388.60
- The S&P 40 Latin America Index closed up 2.89% at 3,761.64 points
- The U.S. 10-year Treasury bond rate rose 0.7 basis points to 4.28%
- E-mini S&P 500 futures rose 0.13% to 6,950.50
- E-mini Nasdaq 100 futures prices unchanged at 25,455.00
- E-mini Dow Jones Industrial Average futures rose 0.28% to 49,486.00
Bitcoin Statistics
- Bitcoin dominance: 59.63% (-0.02%)
- Ethereum-Bitcoin ratio: 0.02966 (0.61%)
- Computing power (seven-day moving average): 880 EH/s
- Hash price (spot): $33.97
- Total fee: 3.3 BTC / $254,499
- CME Futures Open Interest: 115,185 Bitcoin
- BTC in gold: 15 ounces.
- Bitcoin and gold market capitalization: 5.06%
technical analysis
- This chart shows XRP price fluctuations in the form of candlesticks.
- The price has broken the $1.60 support level. This was the level at which buyers stepped in during the April sell-off, halting the decline.
- Therefore, the price decline indicates a significant weakening in demand, suggesting that further declines towards $1.00 are possible.
crypto stocks
- Coinbase Global (COIN): Closed Tuesday at $179.66 (-4.36%), after closing at $179.32 premarket, -0.19%
- Circle Internet (CRCL): Closed at $56.16 (-4.59%), -0.32% at $55.98
- Galaxy Digital (GLXY): Closed at $21.98 (-16.87%), +0.18% at $22.02
- Bullish (BLSH): Closed at $27.64 (-3.93%), -0.14% at $27.60
- MARA Holdings (MARA): Closed at $9.05, -0.77% , -0.99% at $8.96
- Riot Platforms (RIOT): Closed at $15.34 (+0.13%), -0.46% at $15.27
- Core Scientific (CORZ): Closed at $17.74 (-0.73%), unchanged pre-market
- CleanSpark (CLSK): Closed at $11.36 (+2.90%), -0.97% at $11.25
- CoinShares Valkyrie Bitcoin Miner ETF (WGMI): Closed at $45.30 (+1.94%)
- Exodus Movement (EXOD): Closed at $10.47 (-6.35%), unchanged pre-market
Cryptocurrency Treasury Corporation
- Strategy (MSTR): Closed at $133.26 (-4.56%), -0.68% at $132.36
- Strive (ASST): Closed at $0.68 (-5.67%), -3.08% at $0.66
- SharpLink Gaming (SBET): Closed at $7.66 (-1.67%), -1.57% at $7.54
- Upexi (UPXI): Closed at $1.55 (-4.32%)
- Lite Strategies (LITS): Closed at $1.15 (+0.88%)
ETF flows
Spot BTC ETF
- Net daily traffic: -$272 million
- Cumulative net flow: $55.28 billion
- Total BTC holdings are approximately 1.28 million
Spot ETH ETF
- Daily net traffic: $14 million
- Cumulative net flow: $12.02 billion
- The total amount of ETH held is about 5.9 million
Source: Farside Investors
