The cryptocurrency market is experiencing a massive sell-off that started during the New York midnight trading session.
The crypto market has lost as over $350 billion worth of investors’ wealth in the last 24-hours
Bitcoin price is down 17% to trade just above $47,000 taking its market cap below the $1 trillion mark.
The cryptocurrency market has slumped once again by wiping out more than $350 billion of the entire market cap. This is a 17% drop over the last 24 hours according to data from CoinMarketCap. The pioneer cryptocurrency has plunged more than 17% at the time of writing, tanking below crucial levels. Bitcoin price lost as much as 25% from the highs of $57,999 on Friday to low of around $43,787 earlier today. Is Bitcoin (BTC) on sale?
Bitcoin’s Market Cap Slips Under $1 Trillion
The ongoing market correction that started during the midnight New York trading session comes as uncertainties surrounding the Omicron Covid variant spread across the global market. While the U.S. stock markets stayed under pressure over the last week, the spill over has been spread to other markets including the crypto market.
At the time of writing, the Bitcoin price is hovering in the red around $47,979 with its market cap standing at $892 billion. This is a 17% decrease of the last 24 hours which has taken BTS’s market value below the $1 trillion mark, a first in the last two months.
Bitcoin Three-Month Market Cap
Going hand in had with the current BTC/USD correction is data from on-chain metrics provider which indicates that total balance in the Bitcoin accumulation addresses witnessed a sharp drop. This is an indication that there were warning signs based on exchange activity in the recent past pointing to the current price dip.
Moreover, investors appear concerned at the emergence of a new COVID-19 variant and hawkish comments from the Federal Reserve Chair Power. Meanwhile, veteran investment icon Charlie Munger added to the fire by comparing the price action in the crypto market to the dot-com era that ended with the bubble popping.
Here’s a look at what technical tell us the current down turn in BTC and what to be on the lookout for as 2021 comes to an end.
Stiff Overhead Resistance For Bitcoin Price At $48,500 and $49,000
The nature of BTC price action has been a mix of a choppy market and a downtrend over the past few weeks. The crypto market intelligence firm Decentrader affirmed this when it highlighted that Bitcoin’s market action was choppy on lower timeframes and a slow downtrend on the longer timeframes causing fear among those who want to buy Bitcoin that the top has already gone.
This is true as Bitcoin price appears to have formed a descending parallel channel on the daily chart and faces significant hurdles upwards. This is given by the resistances posed by the middle boundary of the channel at $52,673 and the 100-day Simple Movign Average (SMA) at $54,653. Further up, BTC faces hurdles from the upper boundary of the channel at $57,50, the $60K psychological level and the 50-day SMA at $60,590.
This point to a continued price correction and failure to hold on to the immediate support offered by the lower boundary of the falling channel at $47,436 could see the big crypto sink to tag the 200-day SMA at $46,460.
Massive overhead pressure could cause a deeper correction that could force Bitcoin bulls to retreat towards the September 21 low just above the $40,000 psychological level.
BTC/USD Daily Chart
BTC’s bearish outlook is accentuated by the downward movement of the Relative Strength Index (RSI) as seen on the daily chart. The entry of the RSI into the oversold region is an indication that BTC is under the control of the bears.
In addition, the downward movement of the Moving Average Convergence Divergence (MACD) indicator adds credence of to the bearish narrative. Also note that the MCD sent a call to sell Bitcoin on Friday. This happened when the blue MACD line (the 12-day Exponential Moving Average – EMA) crossed below the orange signal line (the 26-day SMA) triggering massive sell orders that have fuelled the current correction in BTC.
Moreover, the position of the MACD below the zero line in the negative region and the down-slopping moving averages point to a negative market sentiment validating Bitcoin’s bearish narrative.
On the flipside, if bulls manage to bull BTC price back above the $52,672 embraced by the middle boundary of the descending channel, they will be bolstered to push the price higher to tag the 100-day SMA at $54,655.
Altcoins Lose More That $200 Billion In Market Value
The Friday night correction was equally brutal to assets in the altcoin space. The world’s second-largest cryptocurrency by market capitalisation, Ethereum (ETH) is down 13.66% slipping under its crucial support levels of $4000, to $3,46 at press time. All of the crypto’s in the top-thirty category are in the red with some dropping as much as 25% in the past 24 hours.
Even the last week’s top performers like Avalanche (AVAX) and Polygon (MATIC) have tanked 12% and 10% respectively at the time of writing. In general, the altcoin space had managed to hold back relatively well over the Bitcoin consolidation over the last few weeks. However, bears seem to have taken absolute control of the market as of now.
The overall cryptocurrency market cap now stands at $2.22 trillion and Bitcoin’s dominance rate has slipped to 40.53%.
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