Cryptos remain in euphoria-land – Crypto News
- Cryptocurrencies continue to strengthen
- Bitcoin posts new all-time high, but ethereum lags behind
- Short-term gold-bitcoin correlation remains negative
- 88,850 area is key support if a correction takes place
Cryptos’ journey north continues
It has been two weeks since president-elect Trump won the US election, and the cryptocurrency world is still feeling very positive about the next four years. Bitcoin continues to record new all-time highs almost daily, pulling the other major cryptocurrencies higher.
November is generally perceived as a positive month for cryptos. Bitcoin is confirming this expectation with a 35% rally, the strongest monthly performance for the king of cryptos since February. Interestingly, ethereum is lagging with just a 22% gain. Contrary to bitcoin, the world’s second largest cryptocurrency is still around 24% below its March all-time high of $4,094. The ethereum blockchain is facing strong competition from Solana’s blockchain, which tends to be faster and thus more attractive to traders.
Cryptos rally despite negative sentiment elsewhere
There are a few interesting factors about the ongoing rally in cryptos. In contrast to stock indices, cryptocurrencies have not yet experienced a consolidation phase post-US election, as euphoria continues to linger among crypto investors and specialists. Trump’s rhetoric about trade tariffs and tax rate cuts fueled the upleg in stocks, but market participants seem to be having second thoughts about the actual implementation of these proposals.
Additionally, the latest developments in the Ukraine-Russia conflict have not dented the appetite for cryptocurrencies. In fact, during crises investors tend to turn to safer assets like the dollar. Therefore, some of the ongoing demand for cryptos might be stemming from the geopolitical developments.
Correlation with gold broke down after the election
Gold has been the main victim of Trump’s win, losing up to 8% from its pre-election date close. The one-month correlation with bitcoin broke down in the aftermath of the US presidential election, dropping into negative territory as the two assets moved aggressively in opposite directions. However, gold has found its footing this week, benefiting from the geopolitical developments and thus rising around $120 from its post-US election low.
Bitcoin’s rally reaching overstretched levels
From a technical standpoint, bitcoin has recorded an almost exponential move higher, easily surpassing its March highs and climbing to the $97,000 area. The next key resistance level is just a tad higher from current levels, as the 200% Fibonacci extension of the March 14 – September 5 downtrend is positioned at $98,161.
Momentum indicators are clearly on the buyers’ side, with the RSI trading at the highest level since February and the stochastic oscillator comfortably hovering in its oversold area (OS). A move below its OS could open the door to a possible correction, with the next support level being the 161.8% Fibonacci extension level at $88,856. A break below this level could result in a more protracted selloff.
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