Bitcoin (BTC) and the broad market were back in the deep-red territory on Saturday. Bitcoin was down for the fourth straight day, hitting the $35,000 level for the first time since July 25.
On the day, Bitcoin fell 3.82% to end the day at $35,076. Elsewhere, things didn’t look any better. Ethereum (ETH) now lost 6.12% after Friday’s 14.4% plunge, and Crypto.com Coin (CRO) plunged 16.87%. On Friday, Crypto.com Coin was down 14.6%. Cardano (ADA) fared marginally better, falling only 4.46% on Saturday.
The cryptocurrency market capitalization fell another $85 billion on Saturday, having already lost $200 billion on Friday. At the time of writing, the total market capitalization stood at $1,611 billion. In November, total market capitalization had risen to an ATH of $3,009 billion before plunging to a one-month low of $1,514 billion.
The Bitcoin Fear & Greed Index.
As of January 22, the Bitcoin Fear & Greed Index stood at 13/100, and although the index remains above the January 8 low (10/100), it’s down from last month’s high (24/100).
Having failed to reach the 30/100 mark and advance into the orange zone, the index continues to reflect the bearish sentiment of the market. Significantly, the index has been in a downward trend since January 20 (24/100). On November 9, the index had risen to 84/100 before going into reverse.
With bitcoin bears currently in full control, we still believe that a return of the index to 30/100 would be needed to signal the start of a bitcoin recovery.
Market sentiment on monetary policy FED and regulatory talk and activity remain the key drivers.
While U.S. markets are closed for the weekend, there was no positive news to change market sentiment. With FED in action next Wednesday, dip buyers may be sitting on the sidelines. While the markets have started to price in 4 rate hikes for this year, nothing is set in stone. Wednesday’s rate statement and press conference will provide clarity on what’s in the shop for this year.
Away from FED monetary policy, central bank talk and threats of further action also remain omnipresent. Following SEC Chairman Gensler’s comments last week about increased scrutiny of crypto markets, regulatory activity is likely to increase in the coming months.
However, the most important news of the weekend was the Russian Central Bank’s proposal to ban cryptos and crypto mining. As the market reaction to this news was negative, the markets will be informed about the planned ban on Monday at the earliest.
All this suggests that another choppy day is ahead.
At the time of writing, Bitcoin was up 0.90% at $35,392. Bitcoin would need to avoid a drop below today’s $35,339 to reach Saturday’s high of $36,812. However, a change in sentiment would be needed for Bitcoin to overcome the first major resistance at $36,549.
A drop below the daily high would bring into play the $34,000 level and the first major support at $33,867. However, in the event of a prolonged sell-off, support at $30,000 could come into play. For Bitcoin and the overall market, the absence of regulatory discussions earlier in the day could provide some relief. However, it’s unlikely that the current bearish sentiment will turn…