Bitcoin, Ethereum, XRP, Dogecoin Retreat As Nvidia Drags Down Tech Stocks: Analyst Highlights Historical 'Sweet Spot' Where BTC Bottomed

Leading cryptocurrencies cooled down on Thursday amid uncertainty over potential market bottoms.

Crypto Market Takes U-Turn

Bitcoin reversed after Wednesday’s relief rally, while trading volume for the apex cryptocurrency dropped 22% over the past 24 hours. Ethereum fell sharply in the early trading hours but rallied to recover losses by afternoon.

Bitcoin’s market share narrowed to 58%, while Ethereum’s dominance fell to 10.5%.

Shares of cryptocurrency-related companies, including Strategy Inc. (NASDAQ:MSTR)  and Coinbase Global Inc. (NASDAQ:COIN), closed down 1.66% and 1.57%, respectively.

Over $240 million was liquidated from the market in the last 24 hours, with bullish long traders bearing the brunt of the losses.

Bitcoin’s open interest fell 2.39% over the past 24 hours, aligning with the correction in spot price. Meanwhile, retail and whale investors with open BTC positions on Binance remained long, according to the Long/Short Ratio.

“Extreme Fear” sentiment prevailed in the market, according to the Crypto Fear & Greed Index.

Top Gainers (24 Hours) 

The global cryptocurrency market capitalization stood at $2.26 trillion, following an increase of 3.02% over the last 24 hours.

Nvidia Drags Tech Stocks Down

Major indexes pulled back on Thursday.  The S&P 500 slid 0.54% to end at 6,908.86, while the tech-focused Nasdaq Composite fell 1.18% to close at 22,878.38. The Dow Jones Industrial Average eked out a gain of 17.05 points, or 0.03%, to finish at 49,499.20.

Shares of Nvidia Corp. (NASDAQ:NVDA) closed 5.46% lower in regular trading, following an earnings release that topped expectations and included upbeat guidance.

The sell-off could be driven by concerns surrounding AI-related capital expenditures and questions about the monetization timeline of emerging technologies such as quantum computing.

Meanwhile, shares of Block Inc. (NYSE:XYZ) surged in Thursday’s extended trading after the fintech company reported fourth-quarter earnings and announced it will reduce its workforce by more than 40%.

How Far Are BTC, ETH From Bottoms?

Widely followed cryptocurrency analyst and trader Ali Martinez spotted Ethereum's Market Value to Realized Value ratio at 0.78, below levels that have historically signaled market bottoms.

"Historically, when the MVRV Ratio drops below 0.80, Ethereum has often been trading at or near macro bottoms," the analyst said.

The Market Value to Realized Value ratio identifies if an asset is overvalued or undervalued, signaling potential market tops or bottoms.

On-chain analytics firm CryptoQuant projected Bitcoin's bottom broadly between June and December this year, with September-November as the historical “sweet spot.”

The chart compared post-halving price action from past cycles against the current 2024 cycle, showing an average of 777–925 days from halving to cycle bottom

Photo Courtesy: Marc Bruxelle on Shutterstock.com