Christmas rise in crypto could be a trap

Cryptocurrencies have joined the rise in the stock market, albeit with a slight delay. The total capitalisation of all coins rose 4.5% in the past 24 hours to $2.38 trillion.

The Crypto Fear & Greed Index has risen to 41 today after 34 yesterday but has room to grow thanks to the continued positive momentum since last night.

Bitcoin enjoyed impressive demand, adding 5.4% overnight.

The return of risk demand in traditional financial markets pushed the rate above $50K, which attracted new buyers and quickly took the price to $51K.

On the data analysis side, we get a strong bullish signal in the form of a pullback from the 200-day moving average and recovery of the RSI from an oversold area on the daily charts.

Ether has had a more challenging time and has been lagging the crypto market for the past few days, struggling to cling to $4100.

Signs of a local reversal to growth are becoming more evident. The coin being bought on intraday declines and forms an uptrend similar to the one in October-November.

At the same time, traders should increase caution in the coming days, as lower liquidity often spurs volatility Volatility In terms of trading, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a means of describing an instrument’s fluctuation. For example, a highly volatile stock equates to large fluctuations in price, whereas a low volatile stock equates to tepid fluctuations in price. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, In terms of trading, volatility refers to the amount of change in the rate of an index or asset, such as forex, commodities, stocks, over a given time period. Trading volatility can be a means of describing an instrument’s fluctuation. For example, a highly volatile stock equates to large fluctuations in price, whereas a low volatile stock equates to tepid fluctuations in price. Overall, volatility is an important statistical indicator used by many parties, including financial traders, analysts, Read this Term. In addition, it is common for the market to give false signals during low liquidity Liquidity Liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations. Thus, if an asset is extremely liquid, it means one can trade that asset in the knowledge that one’s specific dealing won’t create significant movements in the market.This is because there exists such a large number of traders going both long and short, generating huge volume for that particular asset. Liquidity in the FX MarketTake the example of the foreign exchange marke Liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations. Thus, if an asset is extremely liquid, it means one can trade that asset in the knowledge that one’s specific dealing won’t create significant movements in the market.This is because there exists such a large number of traders going both long and short, generating huge volume for that particular asset. Liquidity in the FX MarketTake the example of the foreign exchange marke Read this Term holiday trading. So it is better to let the current positive signals of tech analysis pass the test of time and liquidity.

This article was written by FxPro’s Senior Market Analyst Alex Kuptsikevich.