Bitcoin Price Reclaims $36,000 As Crypto Market Stabilizes After Last Week's Correction

Bitcoin price surged to $1,834 in just 4 hours after briefly hitting $34,000. After the broad market correction this past week, the overall crypto market has stabilized. At the time of writing, Bitcoin is currently changing hands at around $36,145 and is up slightly over the past 24 hours.

bitcoin-price-retakes-36000-as-the-crypto-market-stable-after-last week-correction

BTC/USD 4-hour chart | Source: TradingView

Bitcoin price steady as altcoins underperform

While BTC and the crypto market appear to be closely following recent stock market performance, the relationship between bitcoin and the Nasdaq 100 stock index, the favored proxy for the tech sector, remains weak – another reminder of the more important factors that could affect the BTC and crypto markets. The main stock indexes fell earlier in the day as investors closely watched the Federal Reserve’s first meeting of this year, which will take place this week. The US stock market also rebounded late in the afternoon on Monday.

BTC has returned above $36,000 after multiple oversold signals appeared on the chart. The cryptocurrency faces initial resistance at $40,000, limiting near-term gains. It is up 3% over the past 24 hours after rising from an intraday low near $33,000, while the broader crypto market has stabilized.

The Relative Strength Index (RSI) of the daily chart has recorded its highest oversold level since the March 2020 crash. The previous extreme low was on November 20, 2018, a few days before the crash. month of price action in the range before the recovery. For now, the downtrend of lower prices since November is still intact, meaning sellers may continue to operate at the resistance levels.

“Do traders go from FUD to FOMO in just one day? After Sunday’s bloody performance in negative trading profits, Monday recovered well for BTC, ETH and others. This led to the majority of buy calls for over a month,” said Santiment.

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The source: Santiment

Nearly $700 billion in value was erased as the market correction caused BTC to drop 28% for the year and Ether (ETH) to drop 40%. The new figures imply that the crypto market capitalization has nearly halved since its all-time high, around $3.1 trillion in November.

It is not uncommon for highly volatile cryptocurrencies to experience rapid and devastating price drops in excess of 50%. In April 2013, the bitcoin price surged to a high of $230 from just $13 in January. Within days, bitcoin had plummeted to $68, a 70% drop.

The last crypto bull run of 2017-2018 saw a similar pattern – a rapid, parabolic price pump, followed by a sharp drop in the following weeks. During the 2018 sell-off, the crypto market capitalization plummeted from a high of $850 billion in January to $130 billion in December, a staggering 85% drop.

It took three years for bitcoin to return to its 2017 all-time high, marking a period of distress that veteran HODL-ers remember as “crypto winter.” While the rebates vary in magnitude with each subsequent crypto cycle, it seems that the “supercycle” hypothesis – that cryptocurrencies are on the verge of mass adoption – is gaining some traction. Traders launched last year died in the country.

As the crypto space matures, bitcoin and ether dominance has declined, meaning altcoins are making up a larger share of the broader crypto market cap.

Tokens like Fantom’s FTM (-21% as of now) and Cosmos’ ATOM (-7%) have outperformed both bitcoin (-28%) and ether (-40%). Traders who have bought FTM and ATOM long and hedging positions by short selling BTC or ETH can still make a profit. Short selling occurs when an investor borrows a security (or, in this case, cryptocurrency), sells it on the open market, and expects to buy it back later at a lower price.

Meanwhile, some of 2021’s hottest tokens, such as PolygonMATIC’s (-44%), Solana’s SOL (-51%) and Avalanche’s AVAX (-48%), recorded heavy losses in less than a month. The overall crypto market cap is $1.624 trillion and Bitcoin Dominance is 42.1%.

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