Bitcoin fell to $38,200 in the early hours of Monday morning, its lowest level in six weeks, demonstrating that the ongoing market sell-off is far from over.
Bitcoin begins a new week in an uncertain state, with $40,000 sitting as resistance, causing volatile price activity in the cryptocurrency market as a whole.
Following in the footsteps of stocks, the world’s largest cryptocurrency has just ended its fourth consecutive red weekly candle, a mark not seen since June 2020.
Long orders have been liquidated in big numbers as the cryptocurrency market has failed to rise in recent hours. The two most prominent cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), have declined around 2% and 3% in the last 24 hours, respectively.
The bulk of other major cryptocurrencies have similarly underperformed. In the last 24 hours, Solana (SOL), Polkadot (DOT), Terra (LUNA), and Avalanche (AVAX) have all declined 5%, 6%, 3%, and 5%, respectively.
The sell-off sparked by investors losing faith and retail anxiety resulted in 106,554 traders selling across the cryptosphere in just 24 hours, liquidating a total value of more than $310 million, according to Coinglass statistics.
Fear accompanied the lack of confidence as traders and investors lost faith in Bitcoin in the short term, as Bitcoin fell below $40,000. The sentiment gauges of the Crypto Fear & Greed Index reveal that the market is moving back into the “extreme fear” zone, indicating traders’ concerns.
The cryptocurrency market has been influenced by the global equity markets, which are currently in a bearish trend, with European stocks hanging near one-month lows and S&P 500 futures down 0.7 percent. Commodities also suffered significant losses, putting a stop to their recent resiliency. Gold, a traditional inflation hedge and safe haven, sank nearly 1% to $1,917 per ounce.
According to a tweet by Zen (@WiseAnalyze), the dollar index, which gauges the greenback’s value against major currencies, exceeded 101 for the first time since March 2020, demonstrating the US dollar’s strength as investors flock to it as a safe-haven asset.
The Chinese yuan also dropped to 6.553 per dollar, the lowest level since November, indicating that investors are concerned about a recession in the world’s second-largest economy.
The price trajectory of bitcoin remains unknown, and there are no clear indications as to what will happen in traditional markets in the coming months, which will have a significant impact on Bitcoin’s direction, so be on the lookout and manage your portfolio wisely.