Bitcoin Spikes, Ethereum, Dogecoin Drop: Why This Analyst Is Warning Not To Get 'Too Comfy'

Bitcoin spiked on Monday evening as the global cryptocurrency market cap rose 0.4% to $1.1 trillion at 8:30 p.m. EDT.

See Also: How To Get Free Crypto

Why It Matters: The two-largest coins moved in opposite directions at the time of writing. 

The apex coin’s movements mirrored stocks that closed firmly in the green as investors awaited key consumer price inflation data. The S&P 500 and Nasdaq ended Monday higher by 1.1% and 1.3%, respectively. U.S. stock futures were in the green, albeit little changed, at the time of writing.

Justin Bennett warned cryptocurrency investors not to get too comfortable because the S&P 500 is “doing the same thing it's done all year.”

“The only difference is the length of this retest, which just means more trapped longs if it repeats,” said the trader sharing a chart tracking the index.

The dollar index, a measure of the strength of the greenback against a basket of six international currencies, fell 0.1% to 108.22 at the time of writing.

“Whether it's the expectation of a dovish shift, a weaker dollar or just an improvement in broader risk appetite, something is giving cryptos a big boost and that's helped bitcoin hit its highest level since it went into freefall on 19 August,” said Craig Erlam, a senior market analyst with OANDA, in a note seen by Benzinga. 

“Things may be looking up in the short term, although once more, that may well depend on the inflation data.”

GlobalBlock analyst Marcus Sotiriou touched on “The Merge” or Ethereum’s shift to a proof-of-stake mechanism from a proof-of-stake mining model and said it will be good for the coin and the wider cryptocurrency space in the long term.

Sotiriou noted that Ethereum investors will receive a yield of near 5%, which means the entirety of the Decentralized Finance (DeFi) sector will have a benchmark yield to base yield off.

“It could allow the DeFi space to flourish as investors now have a method to price risk. In addition, institutional investors love cash flow, so being able to receive a lucrative yield is another enticing benefit which could make ETH more investable for them.”

Cryptocurrency trader Michaël van de Poppe tweeted that Ethereum is losing momentum in the Bitcoin pair as the apex coin takes the spotlight but he expects the second-largest coin to continue the pace provided the merge succeeds.

Santiment said Bitcoin has risen above the $22,000 mark for the first time in over 3 weeks.

The market intelligence platform tweeted that Bitcoin’s “ratio of transactions in profit vs. loss is at its highest since March, and it appears that many have viewed this mild bounce as the trigger to trade again.”

Ali Martinez said Bitcoin open interest across all exchanges has shot up more than 20% in the last four days.

The chartist tweeted that the last time Bitcoin reached the 200-day moving average on its 12-hour chart, it led to a steep correction. 

The apex coin “must print a 12hr candlestick close above $22,950 to invalidate the bearish outlook,” said Martinez.

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