Crypto Volatility Bitcoin's Correction and Ethereum's Uptrend

December 31, 2024 02:41 AM AEDT | By Team Kalkine Media

Crypto Volatility Bitcoin's Correction and Ethereum's Uptrend — Image source: shutterstock

Bitcoin's Technical Struggles

Bitcoin, often seen as the market leader, is currently undergoing a technical pullback. After reaching significant highs earlier this month, Bitcoin's price has slipped to $93.5k, dipping below its 50-day moving average. This marks a critical juncture, as the price now rests at the 61.8% retracement level, signaling potential for further decline. A drop below $93k would indicate a break in the short-term trend, possibly leading to a deeper pullback, which could reverse much of the gains achieved in the November-December period.

Ethereum Stands Strong Amidst Market Challenges

In contrast, Ethereum (ETH) has managed to show resilience despite the overall market downturn. The coin has seen slight positive movement, up by 0.6% in the past 24 hours, as buyers have been entering the market during price dips towards $3300. This suggests an uptrend for Ethereum, even as Bitcoin faces volatility. Ethereum's continued strength could indicate growing confidence in its long-term potential, especially amidst Bitcoin's uncertainty.

Bitcoin and Ethereum ETFs Diverging Trends

The differences between Bitcoin and Ethereum are also evident in their respective exchange-traded funds (ETFs). Bitcoin ETFs have seen net outflows totaling $387.5 million for the week, the highest since early September. This marks a shift after three weeks of positive inflows. Meanwhile, Ethereum ETFs have seen positive net inflows, totaling $349.2 million, continuing a five-week trend of growth. These contrasting trends could signal diverging investor sentiment in both cryptocurrencies.

As the cryptocurrency market faces heightened volatility, Bitcoin and Ethereum are experiencing different outcomes. Bitcoin is nearing a technical pullback, while Ethereum is showing strength despite market fluctuations. The ETF trends further illustrate this divergence, with Bitcoin seeing outflows while Ethereum benefits from sustained interest.

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