Bitcoin price continued to slide, falling below $42,000. The largest cryptocurrency by market capitalization fell to last week’s highs as investors worried about dire macroeconomic conditions, including supply chain issues during the pandemic. : the coronavirus is on, inflation is on the rise, and the tech market is down. At press time, Bitcoin is trading at $42,035, down 1.4% on the day.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin Price Slips Below $42,000 Altcoins Fall
Bitcoin price traded around $41,000 on Wednesday as some traders appeared to be in no hurry to bottom out. Analysts see upside potential in the short term, especially as technical indicators remain in oversold territory for about a month.
Cryptocurrency investors tend to seek relative safety in Bitcoin during times of market stress. Bitcoin’s market capitalization relative to total crypto market capitalization, or BTC dominance, is starting to stabilize around 40%. That was the lowest level since 2018 when altcoins fell more than BTC.
Bitcoin continues to hold the support above $40,000 as momentum improves on the intraday chart. The cryptocurrency has fallen about 4% over the past week, although numerous oversolds suggest that buyers may continue to be active during the Asian trading day.
The Relative Strength Index (RSI) on the 4-hour chart approached oversold levels on Tuesday, similar to what happened on January 5, before prices rallied nearly 10% a few days later. However, the upside momentum seems to be capped towards the $43,000-$45,000 resistance area. And $48,000 could pose another setback for buyers due to a flurry of lower prices since November.
On the daily chart, the RSI has remained in the oversold/neutral zone for about a month, which usually happens during a downtrend.
“With so much volatility, perceptions of the highest cap assets vary everywhere. Bitcoin traders believe that a buying opportunity is approaching and the euphoria in Ethereum is remarkable. Meanwhile, Cardano and BinanceCoin traders are showing FUD,” stated Santiment.
The source: Santiment
Ether followed a similar path and fell slightly on the day, trading between $3,000 and $3,200 during the last 24 hours. At press time, ether was at 3,124, down 1.7% over this time period. Most of the major altcoins have spent the day in the red.
The overall crypto market cap is $1.977 trillion and Bitcoin Dominance is 40.2%.
Sign up for a Binance account here (10% off trading fees): https://accounts.binance.com/en/register? ref = 28703923