Cryptocurrencies lose altitude to start out the brand new week

Cryptos are facing a pullback to start the new week, with both Bitcoin and Ethereum notably dropping. The former is down close to 2%, adjusting lower after failing to get above $124,000 last week. The latter is seeing a similar rejection of the $4,800 mark. The Friday decline already saw Bitcoin lose near-term momentum and with the latest drop today, Ethereum is suffering a similar fate.

The near 5% fall today takes out the 200-hour moving average (blue line), after buyers had tried to defend the level over the weekend. The break there now sees the near-term momentum switch to being more bearish again. That is allowing for a test of the 38.2 Fib retracement level of the swing higher since the start of August, seen around $4,242.

In short, buyers are now feeling exhausted as the upside leg reverses and the pullback is gathering a bit more traction.

This is the first time since 4 August that price action has dipped below both key hourly moving averages. As such, there is scope for the retracement to run further before dip buyers step back in.

For now, overall risk sentiment is also holding more tentative. Risk trades were optimistic last week in pushing Fed rate cut expectations but have since pulled back amid some slight inflation concerns. So, keep an eye on that as well in looking into the crypto mood this week.