Bitcoin, Ethereum, Dogecoin Have a 'Terrible' Start To 2022 — Why This Analyst Thinks Short-Term Is Looking 'Ugly'

Bitcoin BTC/USD traded flat Sunday evening as the global cryptocurrency market cap fell 1.2% to $1.9 trillion.

What happened: The apex coin inched up 0.1% to $41,778.88 over 24 hours. BTC has fallen 11.45% over a seven-day trailing period.

Ethereum ETH/USD was up 1.4% at $3,149.96 over 24 hours. For the week, the second-largest coin by market cap, has plunged 17.4%.

Dogecoin DOGE/USD was down 0.6% at $0.15. The meme cryptocurrency has dropped 13% over a seven-day period.

Shiba Inu (SHIB)  was up 1.35% at $0.000028 over 24 hours. The DOGE-rival has shrunk 16.6% over the week.

The top gainers over 24 hours were Chainlink (LINK), UNUS SED LEO (LEO), and Internet Computer (ICP), according to CoinMarketCap data.

LINK spiked 7.8% to $27.89, LEO rose 7% to $3.84, while ICP gained 6.4% to $33.78 in the period.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: Economist and trader Alex Krüger said on Twitter in a thread on Sunday that the U.S. Federal Reserve, which had been adding $120 billion a month via Quantitative Easing since the “coronacrash,” would now need to conduct tapering at more than $50 billion a month.

Assuming tapering at $80 billion, the central bank will move from pumping an additional $120 billion into the economy to removing $200 billion a month. This would work to the detriment of cryptocurrencies since they are “the furthest end of the risk curve.”

​​

Alternative’s “Fear & Greed Index” hit a level of 10 over the weekend, which is the lowest since 21 July 21. At press time, the index that tracks Fear and Greed over values of 0 to 100, flashed “Extreme Fear” and was seen at 23.

Movement Of  "Crypto Fear & Greed Index" — Courtesy Alternative

OANDA Senior Market Analyst Edward Moya said cryptocurrencies had a “terrible start to the year,” thanks to the “growing diversification into other products such as NFTs.”

“Bitcoin remains vulnerable to a breach of the $40,000 level and it could get ugly for Ether if it breaks the $3,000 level.  The long-term outlook is still bullish for both the top two cryptocurrencies, but the short-term is looking ugly,” noted the analyst, in an emailed note.

The percentage of Bitcoin unspent transaction outputs (UTXO) in profit (7-day moving average) has fallen to a 17-month low of 83.9%, according to Glassnode data. UTXO indicates the number of coins left over after executing a transaction; while higher percentages indicate market tops, lower values may signal bottoms.

Meanwhile, Ethereum co-creator Vitalik Buterin’s comment that the project was not ready for mass adoption in its current form triggered the recent sharp downtrend in the coin, according to OANDA’s Moya.

Read Next: Crypto Analyst Who Called Previous Bear Market Says Bitcoin Has Violated Its Parabolic Advance