Bitcoin’s price has dropped to $22,800, a loss of 8% in the last day. On Friday, the most valuable digital asset broke above the $30,000 barrier, then dropped slowly to $27,000 over the weekend before plunging to $24,000 on Monday.
Despite a dip in the Crypto Fear and Greed Index to an all-time low of 8 out of 100, there were no indications of a change in sentiment on Tuesday.
“It’s been a hard few days for crypto traders,” Oanda analyst Edward Moya said. As Wall Street went into a slaughter and Celsius halted all account withdrawals/transfers, confidence in the crypto markets suffered a major knock.”
Other digital materials went through a similar process. The second-largest cryptocurrency, EtherETHUSD –3.61 percent, fell 2 percent to around $1,500, after trading at over $1,800 as recently as last Friday.
Cryptocurrencies with lower market caps, known as “altcoins,” suffered the most on Monday, before recovering on Tuesday. Solana SOLUSD +2.61 percent and Cardano both gained nearly 13 percent. Shiba InuSHIBUSD –2.85 percent gained 6 percent while Dogecoin DOGEUSD –1.17 percent gained 1 percent. Memecoins, which were first meant as online jokes, was significantly more subdued.
Bitcoin and other digital assets have dropped more than 20% in the last four days, leaving market participants to question where the bottom may be.
According to Moya, “the global crypto market valuation has plummeted below $1 trillion, creating awful sentiment for cryptos.” As long as Bitcoin’s price doesn’t go below the $20,000 mark, things might become much worse.
An important element in the recent crypto selloff was Wall Street, where investors have driven the S&P 500 into a bear market amid inflation and recession worries due to aggressive Federal Reserve policies.
Coins like bitcoin should ideally move on their own, but they have been shown to be highly associated with risky assets like equities, particularly tech companies.
After a stock market selloff on Friday, the crypto market falls worsened over the weekend due to issues with crypto market infrastructure and services. Monday’s stock market debacle didn’t help. In spite of Tuesday’s stock market recovery, digital assets remained in the red.
To put it another way, Bitbank’s Yuya Hasegawa believes the crypto market will be more influenced by macroeconomic trends impacting broader markets than it would be by specific crypto-native news like the problems at Celsius. The Federal Reserve’s monetary policy committee will make its next move on interest rates on Wednesday, according to Hasegawa.
It seems that Bitcoin has broken down from a month-long frenzy and might fall as low as $20,000 psychologically, or it could halt at approximately the 200-week moving average, which is now around $22,400, according to Hasegawa’s analysis. In the near future, “the market might eventually reach a selling climax.”
Another expert predicts that the bottom might be significantly lower. According to the trader behind the renowned Rekt Capital newsletter, “Bitcoin tends to retrace anywhere from -46 percent to -63 percent below the 20-month moving average,” he said in the Monday issue. Our 20-month moving average has experienced retracements of -46%, 52%, and 63%, respectively.”
As of this writing, the price of Bitcoin is hovering at $22,000, with a decrease of 46 percent expected to bring it to $19,000. Rekt stated that a 63 percent drop would bring traders down to $15,500.
We also know Bitcoin won’t remain below this moving average indefinitely, the trader stated.