On Monday, a significant sell-off in the stock and bond market prevented Bitcoin from returning to the upside. The recent sell-off confirmed a bearish scenario for bitcoin for now. And one should watch closely to see if this situation becomes toxic for the entire cryptocurrency market.
Bitcoin fluctuated widely on Monday, and at some point, it managed to recover an initially weak start. But pressure on equities in the US trading session and the ongoing strengthening of the dollar dragged crypto down. From intraday highs, bitcoin lost 6.3% by the end of the day, at one point falling to $55,600.
The bears showed who is in control now, clearly demonstrating that bounce attempts are stumbling into aggressive selling. In such an environment, it should come as no surprise that the cryptocurrency Fear and Greed Index moved into “fear” territory, losing 17 points to 33 - its lowest level since Oct. 1.
Perhaps the following line of defense for the bulls could be the $52,000-$53,500 area, where the previous extremes and the 61.8% retracement from the September-November rally are concentrated.
One can only wonder how ETH/USD continues to hold its critical $4000 level amid such aggressive pressure on BTC. The first cryptocurrency appears to be under pressure from institutional sell-offs, of which there are drastically less in Ether.