On Friday, January 21, Bitcoin prices slipped below $38,300. The decline over the last 24 hours exceeded 7%, according to CoinGecko.
Bitcoin briefly dipped below $37,700. The leading cryptocurrency is currently trading at around $38,200.
Ethereum price also continued to fall — at the time of writing, the second-largest cryptocurrency by market cap is trading below $2,770.
Bitcoin is trading near $38,850 at press time.
Over the last 30 days the price of digital gold has fallen by 20%. In January the gauge has already around the $40,000 mark. The drop from the November high of $69,000 was 43%.
Ethereum price has fallen by almost 9%. At the time of writing, the asset was trading near $2,850.
Leaders pulled the rest of the market — all top-10 by market cap were in the red. The biggest declines were Binance Coin (-10%), Cardano (-9.7%), and Polkadot (-9.5%).
The total cryptocurrency market capitalization fell 7%, to $1.94 trillion.
According to Coinglass, over the last 24 hours liquidation volume on the futures market exceeded $716 million. More than 50% of this figure goes to cryptocurrency exchanges Binance and OKX (former OKEx). On the first, positions worth $203.76 million were liquidated; on the second — $203.40 million.
The Fear and Greed Index fell to 19, signaling bearish sentiment dominates the market.
Analyst Michaël van de Poppe noted that the bulls failed to defend the $42,400–$42,700 support, triggering a break of the local trend. He said that further price declines should be expected.
$42.4-42.7K couldn’t continue to hold for #Bitcoin, so a nuke towards the other side of the region and, most likely, continuation towards even further downwards momentum and lower lows -> happened.
Described here:https://t.co/k8HrqajQGV pic.twitter.com/qkqZrEBGhN
— Michaël van de Poppe (@CryptoMichNL) January 21, 2022
Bitcoin-skeptic Peter Schiff stressed that Bitcoin has broken the neckline of a head-and-shoulders pattern. He said the model projects a drop below $30,000 — if that level is breached, a crash below $10,000 is highly likely.
#Bitcoin has finally broken the neckline of a head-and-shoulders top. The scary part for the longs is that the pattern projects a move below $30,000. Once that level is breached Bitcoin will have completed a massive double top. From there a crash below $10,000 is highly likely.
— Peter Schiff (@PeterSchiff) January 21, 2022
Cryptocurrency prices are following a broader trend that has also hit the U.S. stock market. The latter has fallen for a third consecutive trading session. Last Thursday, the NASDAQ Composite closed down 1.3%.
Analysts explained the situation as rising global yields, which increase ahead of the forthcoming higher rates by central banks. Earnings season for American companies added to the volatility.
Since the start of January, the yield on the 10-year U.S. Treasuries has risen by 18%, above 1.78%.
Arcane Research data also point to a higher correlation with the U.S. market. During U.S. trading hours there is greater Bitcoin activity. Analysts noted that this trend strengthened in 2022.
According to Arcane Research statistics, during the trading hours of the U.S. market, Bitcoin’s trading activity is more active, and this trend is more pronounced in 2022. pic.twitter.com/R88Q9OEkfw
— Wu Blockchain (@WuBlockchain) January 21, 2022
Earlier, Bloomberg Intelligence senior commodity strategist Mike McGlone said that the stock market could correct 10%-20%. He added that the crypto market could follow a similar path, though Bitcoin might rise to $100,000 in 2022.
Invesco allowed Bitcoin to fall below $30,000 in 2022, as the asset bubble deflates.
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