Bitcoin cryptocurrencies

Bitcoin Dips by 2.3% Even as Technical’s Show Most Cryptocurrencies are in Oversold Territory

Bitcoin led Cryptocurrencies in a continued dramatic slide over the weekend, losing nearly half of its value since hitting its November high.

Bitcoin, the world’s most valuable cryptocurrency by market value, tumbled about 8% on Saturday to trade just above $35,000. The coin hit a record high of $69,000 in November.

Meantime, ether, the second-largest cryptocurrency by market cap, sank nearly 10% to trade around $2,400.

The losses came on the heels of a Thursday dip in the stock market. Cryptocurrencies and traditional stocks have been falling in tandem this month, with investors concerned about how anticipated Federal Reserve interest-rate increases will affect the market.

A common investment case for bitcoin is that it serves as a hedge against rising inflation as a result of government stimulus, but analysts are saying the risk is that a more hawkish Fed may take the wind out of the crypto market’s sails.

There’s also concern U.S. regulators will further crackdown on digital currencies.

Russia’s central bank proposed banning the use and mining of cryptocurrencies earlier in the week. Officials argued it posed threats to financial stability, citizens’ wellbeing and its monetary policy sovereignty. U.S. authorities have also been clamping down on certain aspects of the market.

Bitcoin Technical Aspects

Bitcoin price started a major decline below the $42,000 and $40,000 support levels. BTC gained pace below the $38,000 level to move further into a bearish zone.

TradingView Chart
BTC/USD Technical performance chart (Bitfinex)

It traded as low as $34,007 and is currently consolidating losses. It is now trading below $38,000 and the 100 hourly simple moving average.

On the upside, an initial resistance is near the $36,200 level. There is also a key bearish trend line with resistance near $36,500 on the hourly chart of the BTC/USD pair. The trend line is near the 23.6% Fib retracement level of the recent decline from the $43,500 swing high to $34,007 low.

The first major resistance is near the $36,800 level. An upside break above the $36,800 resistance could start a steady recovery wave towards $38,000. The next key resistance is near the $40,000 level, above which the bulls might aim a test of $41,200.