This year, the risk-on tone among market participants has been the main theme despite near-term price swings. Sellers returned to full force today, sending both stocks and cryptocurrencies lower. Bitcoin price has dropped as much as 10%, reversing yesterday’s gains to $40,000. Today’s sale is the biggest one in two months. At the time of writing, BTC is changing hands at $36,257.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price declined by 10%, its most significant price drop in two months
Today, the British pound price fell by 2% to $1.24 against the U.S. dollar in its most significant single-day drop since the COVID-19 pandemic began in 2020. The pound’s market value also fell by 1.4% to 85.45 pence against the Euro—its lowest since December 2021. The drop took place amid a broader decline in stocks and cryptocurrencies alike.
Bitcoin’s selling volume isn’t as extreme relative to previous price downturns. That suggests further downside is likely before sellers capitulate. Technical indicators point to another downside toward the $30,000-$32,000 support zone as momentum weakens.
And in the futures market, a large amount of open interest was added to the market during Wednesday’s rally. During Thursday’s sell-off, almost all of that open interest was closed out.
Bitcoin price has been able to break below a series of lower prices that have been trending since January 24, leading to a further drop towards the $30,000 – $32,000 support area. However, a daily close above $37,500 could signal near-term stability. For now, the upside momentum appears to be limited despite the intraday price volatility, as evidenced by the slowing momentum on the daily, weekly, and monthly charts.
The slope of the 100-day moving average has flattened over the past few months, indicating weakness in the relief phase since the Jan. 24 price low near $32,900. Immediate resistance is seen at $40,000, limiting buying activity over the short term.
The 20-day moving average of BTC’s trading volume based on Coinbase exchange data provided by TradingView declined from February to April, reflecting weak buying pressure within the $35,000 – $46,000 price range. Additionally, selling volume isn’t as extreme as previous down moves in price. That suggests further downside is likely before sellers capitulate.
The uptick in volume since late April, although negligible, should be monitored for signs of heightened selling pressure, which could signal a brief price low of around $30,000.
“Crypto traders appear to believe that yesterday’s market-wide price surge was an anomaly, and the short celebration won’t last. Historically, when calls for selling spikes, crowd FUD like this strengthens the case of a continued rise”, Santiment reported.
Source: Santiment
Meanwhile, altcoins such as Solana (SOL) and Avalanche (AVAX) saw similar declines of about 10% over the past 24 hours. Popular meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) declined by 5% and 7%, respectively. Other significant altcoins fell significantly into the red a day after a relief rally that followed the Federal Reserve’s long-awaited announcement of a half-point interest rate hike, with ADA, AVAX, and AXS down 10%, 11%, and 12%, respectively, at one point.
The overall cryptocurrency market cap stands at $1.666 trillion, and Bitcoin’s dominance rate is 41.5%.
Read more:
- Bitcoin Price Spiked Toward $40,000, XRP, SOL, DOT And AVAX Are Among The Best Performers
- Bitcoin Price Soar Following The U.S. Central Bank Rate Hike