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31.03.2025 10:58 AM
Crypto market baffles traders

Recent news from the cryptocurrency market has discouraged investors. Over the past weekend, Bitcoin and Ether experienced sharp drops and failed to return to their upward trajectory, indicating a high probability of further market correction, especially in the absence of positive news.

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As recent data shows, daily cryptocurrency trading volumes have significantly decreased compared to the peak levels reached after the presidential elections and now stand at around $35 billion, which is roughly the level recorded before Donald Trump's victory in the presidential elections.

After the elections on November 5, daily trading volumes surged to $126 billion, fueled by increased market enthusiasm and speculative activity. This represents a decline of about 70% from the peak, returning the market to pre-election base levels in a rather short period, which is a rather poor signal for the medium-term bullish market. Recent announcements of new tariffs against major US trading partners have introduced uncertainty, which has dampened trading enthusiasm in both traditional and cryptocurrency markets. The total market capitalization of cryptocurrencies reached approximately $3.9 trillion at its peak, before pulling back to the current level of around $2.9 trillion.

However, a reduction in trading volume may signal several potential market events in the coming months. Historically, long periods of decreasing volumes have often preceded significant market movements, as liquidity reduction can amplify price impacts when larger players start shifting positions. Once there is more clarity on the Trump administration's full approach to cryptocurrency regulation, demand for risk assets may resume. However, for this to happen, a recovery in the stock market is also necessary, as the cryptocurrency market has recently been strongly correlated with it.

Demand for BTC has been waning and has already dropped to lows not seen since December 2023, according to CryptoQuant data. This trend is also driven by factors including ongoing macroeconomic uncertainty and overall risk aversion among investors. The decrease in demand is reflected in reduced trading volumes on major crypto exchanges, as I mentioned earlier, and in a decline in the number of active wallets interacting with BTC. Besides, there has been an outflow of BTC from exchanges, which may indicate that long-term investors prefer to hold onto their assets rather than actively sell them.

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Technical picture of Bitcoin

Buyers are currently aiming for a return to the $82,600 level, which would open a direct path to $83,700. From there, it would be just a step away from $84,600. The furthest target will be the high near $85,900. Once this level is overcome, it would signal a return to a bullish market. In case of a decline, I expect buyers to appear at the $81,500 level. A return of the trading instrument below this area could quickly push the price down to $80,500. The furthest target in this case would be $79,400.

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Technical picture of Ethereum

A clear consolidation above $1,831 opens a direct path to $1,864. The furthest target will be the high near $1,898. Overcoming this would signal a return to a bullish market. In case the price declines, I expect buyers to appear at the $1,784 level. A return of the trading instrument below this area could quickly push the price down to $1,750. The furthest target in this case would be the $1,717 area.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2025
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