Recent data indicates a decline in capital inflows into Bitcoin and Ethereum, leading to their prices consolidating within a narrow range. Bitcoin faces notable resistance, while Ethereum demonstrates relative strength. The market is seeing a shift in focus towards altcoins as traders reassess their investment strategies, which may impact the future price movements of Bitcoin and Ethereum.

Capital inflows into Bitcoin and Ethereum have decreased recently, leading to consolidation of their prices within a narrow range. Despite the reduced volume resulting in lower volatility, Ethereum’s price remains relatively stable while Bitcoin struggles under significant resistance. Market participants are redirecting their investments towards altcoins like Cardano, Aave, and Maker, thus withdrawing liquidity from Bitcoin and Ethereum, which has resulted in their prices hovering just below key resistance levels.

Bitcoin faces major resistance at the 200-day moving average, positioned at $98,903, while Ethereum’s resistance is noted at $2,760. Although Bitcoin’s price is showing signs of weakness in the rally, Ethereum frequently tests its resistance level. However, the decline in volume diminishes the likelihood of a breakout, indicating that Ethereum may continue to consolidate despite a more robust showing compared to Bitcoin.

According to Glassnode data shared by Ali, capital inflows into both Bitcoin and Ethereum have significantly decreased. This decline in net positions—from $45 billion to $30 billion—indicates a 30% reduction and reflects a shift in the focus of retail traders, who play a vital role in maintaining price volatility. Moreover, the activity among sellers appears to have waned, suggesting that a bullish trend might be forthcoming.

The pressure from bears on Bitcoin prices remains substantial, with bulls struggling to maintain support levels above $95,610. There is a risk that a decline below this support could initiate a bearish reversal pattern. Currently, Bitcoin is at a critical juncture, where a drop could validate an ‘M-shaped’ pattern, potentially lowering prices toward a neckline near $92,500 and paving the way for a further downward trend.

Ethereum began the month with a substantial drop that pushed it below its ascending support line. Despite ongoing efforts to regain upward momentum, insufficient buying volume remains a hurdle. Nonetheless, the price has stabilized at $2,660, indicating that bulls might be gathering momentum for a potential upward movement. Factors like the Chaikin money flow are showing positive trends, suggesting a burgeoning bullish divergence, although a bearish divergence in ADX implies prolonged consolidation if resistance is not overcome.

In summary, both Bitcoin and Ethereum are currently experiencing reduced capital inflows and significant resistance levels that are influencing their price action. While Bitcoin struggles to assert itself above critical support levels, Ethereum is holding steady at a crucial price point. Market dynamics point towards a cautious approach among traders, with a potential shift back towards altcoins, complicating the immediate outlook for these leading cryptocurrencies.

Original Source: coinpedia.org

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