After strong rises in recent weeks, the last few days have seen a decline due to profit-taking, which in recent hours see the price of Bitcoin lose 30% from the highs of January 8th, losing over $13,000.
The drop takes prices back to early January levels. If Bitcoin were to close the week at current levels, or below $36,000, it would mark the second consecutive week that Bitcoin has closed in the red, an event that has not occurred since March 2020 when Bitcoin recorded three consecutive weeks of declines, ending that negative period with the lows that we all know and where the strong rally that is still accompanying the trend began.
This recent decline is also affecting altcoins but with less intensity. Ethereum, the queen of altcoins, has lost just over 25% from its all-time high on Tuesday, January 19th.
After three consecutive days of declines, the positive signs have returned. The day saw just over 55% green arrows.
The day’s best performer was Celo, which gained over 40%. Curve DAO (CRV), the governance token of Curve, is up 30%.
The declines of the last few days bring the total capitalization to hover around $1 trillion.
The dominance of Bitcoin slipped to 64%, its lowest point since mid-December. In contrast, Ethereum consolidates above 14%, its highest peak since August 2018. XRP continues its drama with dominance at 1.2%.
It’s a tough time for Ripple which is displaced by Polkadot, which in turn consolidates the 4th position in the ranking among the largest capitalized companies, pulling away from the capitalization by about $3 billion.
Despite the fall in prices in recent days, the balance since the beginning of the year is still positive, with Bitcoin up 15% and Ethereum up 60% since it opened on January 1st.
The loss of value in the last few hours brings the value of decentralized finance down to $22.3 billion, with Maker confirming its first position as the most used project, returning below $4 billion. Aave is next, followed by Uniswap, the DEX that regains third place in the ranking, with a TVL of $2.8 billion.
Bitcoin (BTC) down
Yesterday’s slide brings Bitcoin prices to test the $29,000 mark, an important support that has been mentioned several times in recent days for its significance. It coincides with the 50% Fibonacci retracement that takes as a reference the recent high and low of the first days of December, a crucial moment that saw Bitcoin achieve one of the most important rallies in its history.
This is why $29,000 is a level to watch over the weekend.
Its holding could give indications that prices have found a stable support where we can once again consider the return of the bullish trend but with prices that will necessarily return above $36,000, a level that coincides with last week’s close. The medium-term trend continues to be set to the upside, but in the short term, caution should be maintained.
For Ethereum, the recent decline confirms the holding and the importance of the support at $1,100, which in recent hours has brought prices back above $1,200.
In spite of the fall of these hours, on a weekly basis Ethereum provides a sign of a comforting hold, which bodes well for the coming week. It is necessary, however, not to extend the declines below 900 dollars, and thus create a basis between 900 and 1,100 dollars from where to restart.