Bitcoin has been struggling to regain a steady upside momentum since its rejection from the $50,000 psychological level at the start of the week. On Wednesday, the largest cryptocurrency by market capitalization is back under pressure but still holds marginally above the 200-DMA, currently at $46,800.
On Monday, the cryptocurrency market suffered a significant sell-off that took BTC below the $47,000 support zone. The decline was mainly due to profit-taking ahead of the FOMC policy meeting and amid other market uncertainties, including the pandemic-related fears due to a fast spread of the Omicron coronavirus variant.
As a result of the recent bearish correction, the bitcoin market cap sank below the $1 trillion mark while its market dominance dropped below 40% and is now very close to reaching a new yearly low.
At this stage, the market focus is on the $46,000 figure. A sustained recovery could be expected if the prices manage to hold above this critical support. However, if the significant level gives up, the selling pressure would intensify and push the digital currency back to last month’s lows in the $41,000 area.
Still, the technical picture suggests bitcoin will likely stay afloat in the short term, and there is no excessive demand from BTC bears at the moment.