For the second day in a row, Bitcoin has been lingering around the $30K barrier, causing the rest of the crypto market to balance falls and gains. Ethereum has dropped 1.2 percent in the last 24 hours, although it is still trading at 2,000.
The top 10 altcoins are generally in decline, dropping between 0.7 and 3.8 percent (DogeCoin) (Polkadot). Tron is up 1.7 percent, although it hasn’t moved much since the end of last week.
According to CoinMarketCap, the total crypto market capitalization fell 1.1 percent overnight to $1.29 trillion. The dominance index for Bitcoin stayed at 44.3 percent.
By Wednesday, the Cryptocurrency Dread and Greed Index had risen 4 points to 12 and was still in “severe fear.” The index’s rebound from 2019 lows is attributed to a fading selloff rather than a market return to growth.
Bitcoin has stuck at the psychologically critical 30K level, as well as the momentum of the 76.4 percent Fibonacci line that has been used to retrace the downward move from late March to last Thursday’s lows. This is a standard counter-trend corrective.
The market’s inability to establish an offensive from current levels raises the possibility that the downtrend’s last objective will be the 161.8 percent region of that move, which is about $11.3K.
Any upward momentum from October 2020 would be wiped away by such a reversal. So far, this scenario appears to be extremely bleak, requiring the disappointment of crypto-neophytes to be combined with a worldwide economic and stock market collapse.
Bitcoin’s price would fall to barely 16 percent of its high, as it has done multiple times throughout its history. However, a big collapse below prior cyclical highs ($20K) would be rare, even if Bitcoin has been repurchased in the past after such drops.
A decline into the $20-23K range to close the gap by the end of 2020, or a return to the 2017 highs, would be a more conservative scenario. Long-term investors might purchase cautiously from present prices, according to the realist-optimistic scenario.
It does not, however, indicate a fresh wave of exponential development, since financial circumstances and a return to the area at the start of 2021 are discouraging for those investors who have been buying cryptocurrencies to make a fast buck. Furthermore, throughout this time span, inflation has eroded the dollar’s purchasing power by 10%.
To read our blog on “Pakistan & 43 other countries convened to discuss Bitcoin adoption,” click here.