Bitcoin Nears $40K as Crypto Market Marks Bearish Start to 2022
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Bitcoin (BTC) and the broader crypto market kicked off 2022 on a depressed tone as the total cryptocurrency market valuation has dropped by about $300 billion in the last week. The heightened bearish bias came after the US Federal Reserve announced that it plans to taper its balance sheet and that it would have at least three interest rate adjustments in 2022.
Bitcoin has suffered a serious deal from the bearish pressure as it fell into the $40K region yesterday, down by about 12% over the past seven days. At press time, the benchmark cryptocurrency trades at $41.6K, or -0.04% on the day.
Not surprisingly, the market mood is in a state of “extreme fear” on the Bitcoin Fear and Greed Index. The index printed a low of 10 yesterday for BTC, which indicates that the investor sentiment towards the asset is that of “extreme fear,” its lowest point since July 2021.
The altcoin space shared a similar fate with Bitcoin, with most crypto assets dumping to significant lows. However, Chainlink (LINK) was the only top 20 crypto to record a positive performance this week, with +25.8%.
Ethereum (ETH), Binance Coin (BNB), Cardano (ADA), Solana (SOL), Ripple (XRP), Terra (LUNA), and Polkadot (DOT) have all recorded double digit declines with -17.3%, -17.9%, -21%, -14.7%, -11.9%, -22.3%, and -17%, respectively.
Key Bitcoin Levels to Watch — January 9
As mentioned earlier, BTC dipped its feet near the $40K support as it briefly fell into the $41K – $31K pivot area yesterday, amid a sustained bearish momentum. Bears appear to have lifted their legs off the pedal on Sunday amid mass profit taking by sellers.
However, analysts expect a bearish continuation over the coming days and a retest of the $40K support. BTC can only nullify this fate by recording an unlikely rebound to the $43K – $44K zone in the near term.
Meanwhile, my resistance levels are at $43,000, $44,000, and $45,000, and my key support levels are at $41,000, $40,000, and $38,500.
Total Market Capitalization: $1.96 trillion
Bitcoin Market Capitalization: $790.4 billion
Bitcoin Dominance: 40.4%
Market Rank: #1
