Bitcoin Struggles To Breach $40,000 Level, Down 4% In Last 24 Hours


Bitcoin is not the king of cryptocurrency for nothing. Most major cryptocurrencies dropped incredibly on Saturday, and that includes Bitcoin (BTC) but it doesn’t seem to budge.

Bitcoin was trading at $39,510 late Friday, down 4%, based on charts by Coingecko, which indicate dangerous waters in trading. Traders incurred huge losses in equity with this trend.

It’s consolation though that at the moment Bitcoin and other cryptocurrencies are frequently tied to stocks in terms of fluctuations in interest rates and market values.

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The massive 4% drop in Bitcoin

4% may be too small to be significant, but it affects Bitcoin and all other cryptocurrencies. With such a significant drop, investors and traders have become increasingly aware of the risks and decided to wait on the sidelines and see what happens next instead of risking huge losses along the way.

However, not taking timely action can hurt and reduce market returns.

Altcoins have also fallen compared to bitcoin. Basically, it is usual for altcoins to underperform when dealing with other cryptocurrencies especially BTC due to it having a higher risk profile compared to BTC.

Despite the decline, Bitcoin remains stable

On a more positive note, technical indicators showed that Bitcoin should be more stable at $38,500 even as the price momentum declines. Traders are always looking for unexpected price spikes, so a downtrend with BTC could make it quite stressful for options traders to profit on erratic price swings.

BTC total market cap at $755. billion on the weekend chart | Source: TradingView.com

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Current trends revolving around the crypto and metaverse worlds can greatly influence how traders behave. For example, when BitMEX co-founder Arthur Hayes said that an imminent crash in the price of BTC was looking at around $30,000, it was followed by traders selling their bitcoins.

This caused traders to sell crazy May and June option calls causing risk to drop from -6% to around -10% for both Bitcoin and Ethereum.

Still an uptrend

With Bitcoin recording the lowest decline in the past two days, this also highlights a mini-downtrend on the part of options traders. Traders can be careful at this point in the time to be somewhat predictable.

Overall, the trading activity in the global cryptocurrency market has been significantly reduced at $1.88 with minimal gains seen in the last 24 hours. However, the total trading volume increased to around 18%.

While the extremely strict monetary policy has negatively affected speculative assets such as cryptocurrencies and stocks, indicators clearly show that it will remain bullish for some time to come.

Featured image from EPA-EFE, chart from TradingView.com



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