Bitcoin price was trading below $36,000 after continuing its recent decline earlier in the weekend

Bitcoin price has dropped to nearly $35,000, reflecting a 50% drop from the all-time high of $69,000 made on November 10, 2021. Altcoins also failed to buck the trend and face off with intense selling pressure, and this dragged the total crypto market cap down to $1.6 trillion, down 46% from the November 2021 all-time high of almost $3 trillion la. At the time of writing, BTC is changing hands at $35,621.

BTC/USD 4-hour chart | Source: TradingView

Bitcoin price heads for the worst week in 8 months

As of press time, BTC was changing hands just below $36,000, up 1.2% over the past 24 hours. Due to margin calls, more than $1.5 billion of BTC trading positions were liquidated over the past three days.

The Bitcoin price is down 19% in the past seven days – the cryptocurrency’s worst weekly performance since May 2021, when fears of China’s renewed crackdown on cryptocurrency trading and mining sent the market reeling, and tweets by Tesla CEO Elon Musk focused public attention on the Bitcoin blockchain network’s potential environmental harms.

This time around, crypto traders appear to be pricing in fears that the Federal Reserve (Fed) will move quickly over the next few months to tighten monetary conditions that have been at historically loose levels since the coronavirus struck the economy in March 2020. The Fed’s stimulus – including trillions of dollars of money printing – was widely cited as a reason for the price gains in 2020 and 2021, including the ascent to an all-time high price of $69,000 in November. The latest shakeout left bitcoin down by roughly half from that record price, in a stark reminder of just how volatile cryptocurrency markets can be.

Bitcoin failed to hold short-term support at $40,000 as sellers maintained the two-month-long downtrend. Intraday oversold signals were not enough to sustain bids, which means longer-term indicators are more reliable to determine bitcoin’s price direction.

Since December, the slowdown in upside momentum on monthly and weekly charts has been a persistent theme. As the long-term uptrend weakens, sellers typically outweigh buyers despite occasional oversold signals.

Bitcoin is roughly 40% below its all-time high of $69,000, a significant drawdown. In July, the previous drawdown was extreme when BTC settled near $28,000 after falling roughly 50% from its peak. Further, when drawdowns become severe, short-term traders tend to reduce their position sizes and tighten trade parameters around intraday support and resistance zones.

For now, initial support is around $35,000-$37,000, which could stabilize the current sell-off. The daily chart’s Relative Strength Index (RSI) is the most oversold since May 19, which preceded two months of sideways trading before a rebound occurred. If selling pressure accelerates this week, BTC could find stronger support at around $30,000.

The total market capitalization was reduced by 5.2%, equivalent to hundreds of billions of dollars evaporated, now recording at $1.635 trillion.