Crypto Market Suffers Downward Spiral as Bitcoin Retreats and Altcoins Follow


The crypto market today presents a negative sentiment as top coins plummet. Bitcoin, after peaking above $67,000, faced resistance that led to a significant drop. Now trading below the $63,000 mark, the leading cryptocurrency’s slump is echoing across the altcoin market, with substantial declines witnessed in major tokens.

Bitcoin’s stumble to $62,950.61 amid spiking US inflation figures and subdued GDP growth has heightened fears of a hawkish Federal Reserve, exacerbating the market’s woes. Altcoins like Solana, XRP, and Shiba Inu have not been spared, each registering significant losses in a market grappling with uncertainty. As trading volumes dip and institutional sentiment cools, the crypto sphere faces a pivotal moment, with the market cap falling to $2.33 trillion and investors cautiously eyeing the Federal Reserve’s next move.

Bitcoin Struggles Around $64k,Trades Within a Tight Range

Bitcoin’s initial recovery showed promise with a surge past the $66,000 threshold, bolstered by geopolitical calm after Iran’s comments. However, the celebration was short-lived as bearish sentiment took hold, leading to a decrease of over $3,000, setting Bitcoin to lows of $63,500. This downward movement has been compounded by notable ETF outflows, contributing to a drop in Bitcoin’s market capitalization to $1.260 trillion on CoinGecko and a dominance figure now hovering around 50.7%.

Bitcoin’s price action is currently trapped below the 50-day and 100-day Exponential Moving Averages (EMAs), typically a prelude to a spike in volatility. The cryptocurrency trades just below  these two technical levels, with the 50-day EMA at about $64,000 serving as the immediate support and the 100-day EMA around $59,500 acting as key support to watch closely.

Adding to the potential volatility, Bitcoin’s trading volume has been in decline, which could foretell sudden price movements if market-shifting orders are placed. A decisive break above the 50-day EMA may push Bitcoin towards the $70,000 resistance. Conversely, a fall below the 100-day EMA could see the price testing lower supports, potentially down to the $50,000 range.

Ethereum Displays Signs of Potential Recovery Amid Pressure

While the overall market faces a downturn, Ethereum shows potential for recovery. A “higher low” pattern has emerged on the charts, suggesting a possible shift in market sentiment from bearish to bullish.At the time of the analysis, ETH trades just above the critical support level of $3,100. After facing a sharp decline, analysts are closely observing the price behavior around this area. 

The 20-day Exponential Moving Average (EMA) has begun to flatten, and the Relative Strength Index (RSI) is treading near the neutral 50 mark, suggesting indecision in the market. Despite this, a potential bullish signal is emerging on the charts as ETH is forming what appears to be a “higher low” compared to the previous dip. This pattern suggests that while sellers are still influencing market dynamics, their control is not as dominating as before. If buyers can sustain momentum and protect the support level, there’s a possibility that Ethereum could test the resistance at $3,400.

A breach of this level could be a significant bullish indicator, potentially propelling the price toward the next resistance near the $3,500 threshold. However, if selling pressure intensifies and ETH breaks below the $3,100 support, it might signal a deeper bearish correction. The price could then seek lower support levels, which might include the $3,000 psychological mark or even further down, depending on market volatility and trading volumes. 

Altcoins in the Red Zone

The altcoin market today mirrors a negative market sentiment as it reels from a sweeping sell-off, casting shadows on the crypto landscape. Leading altcoins are charting a sea of red, with Ethereum (ETH) teetering above the crucial $3,100 mark after a notable decline, raising eyebrows among investors who are keenly watching its ability to sustain the psychological support level.

Ripple’s XRP, Chainlink (LINK), and Litecoin (LTC) have also succumbed to the bearish mood, each recording losses that echo the broader market downturn. Solana (SOL) has been particularly hard-hit, with a sharp 5% drop as it grapples to stay afloat the $140 level. Dogecoin (DOGE), Cardano (ADA), and Polkadot (DOT) have not been spared, registering declines that undercut their weekly performance. Shiba Inu (SHIB), often seen as a market sentiment barometer for meme coins, has retreated by 3.12%.

In contrast, Tron (TRX) bucks the trend with a modest 3% gain, showcasing resilience amidst the market turbulence. Binance Coin (BNB) and UNUS SED LEO (LEO) also find themselves in the small enclave of tokens defying the downtrend, albeit with tempered gains that suggest a cautious approach by the investors.

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About the Author: Daniel