and other cryptocurrencies continued to sell off on Tuesday, dipping another leg as sentiment among traders eroded.
Bitcoin price fell 8% in the last 24 hours to $22,800. The largest digital asset first slipped through the key $30,000 mark on Friday, steadily declining to $27,000 on Sunday before falling precipitously to $24,000 on Monday.
Sentiment showed few signs of reversing course on Tuesday, with the Crypto Fear and Greed Index falling to 8 from 100, signaling extreme fear among traders and a drop from Monday’s 11.
“It’s been a rough few days for crypto traders,” said Edward Moya, analyst at broker Oanda. “Confidence in the crypto markets took a huge hit when a bloodbath broke out on Wall Street and crypto lender Celsius stopped all account withdrawals/transfers.”
It was more or less the same for other digital assets.
the second largest crypto, lost 2% to close to $1,500, having traded around $1,800 last Friday.
But smaller cryptocurrencies, or altcoins, which saw some of the biggest declines on Monday, were recovering.
both earned about 13%. The memecoins, which were initially conceived as jokes on the Internet, were silenced a little more, with
Having fallen more than 20% in four days, market watchers are wondering where the bottom may be for Bitcoin and other digital assets.
“Sentiment for crypto is dire as the global crypto market cap has fallen below $1 trillion,” Moya said. “Bitcoin is trying to form a base, but if the price action drops below the $20,000 level, it could get even uglier.”
Wall Street, where investors have pushed the
in a bear market amid fears around inflation and recession risk from aggressive Federal Reserve policy, it was a major factor in the latest cryptocurrency sell-off.
In theory, Bitcoin and its peers should trade independently of major financial markets, but they have been shown to be highly correlated with other risk-sensitive assets such as stocks, and especially technology stocks.
The declines in the crypto space began last Friday, along with a stock market sell-off, but were exacerbated over the weekend by strains on crypto market infrastructure and services. Monday’s stock market carnage didn’t help. But even as stocks rallied on Tuesday, digital assets remained in the dumps.
Yuya Hasegawa, an analyst at crypto exchange Bitbank, wrote in a note that the crypto market will be inspired more by the macro factors that shape broader markets than other native crypto news, such as the troubles in Celsius. Hasegawa pointed to Wednesday, when the Federal Reserve’s monetary policy committee announces its next move on interest rates, as a key day.
“From a technical perspective, Bitcoin has broken down after a month of rage and it looks like it could drop further to the psychological $20,000 level or stop at a roughly 200-week moving average, which is currently at $22,400,” Hasegawa wrote. in a note “The market may finally be seeing a near-term selling climax.”
The bottom could be even lower than that, according to another analyst.
“Bitcoin tends to retrace between -46% and -63% below the 20-month moving average,” wrote the trader behind Monday’s edition of the popular Rekt Capital newsletter, which focuses on technicals in the crypto market. “We have seen retracements of -46%, -52% and -63% below the 20-month moving average.”
A 46% drop would put Bitcoin at $22,000, while a 52% drop would see the largest crypto hit $19,000. A 63% drop would take traders to $15,500, Rekt noted.
“But we also know that Bitcoin doesn’t stay below this moving average forever,” the trader said.
Email Jack Denton at firstname.lastname@example.org