Bitcoin is moving sideways in the higher range of $ 30,000 with bullish indicators in shorter periods of time. The bulls expect a breakout of the previous support that was now resisting, around $ 40,000. Last day, the first cryptocurrency by market cap hit a low of $ 33,000 and is currently trading at $ 38,3000.
BTC is moving sideways at earlier levels of support. Source: BTCUSD Tradingview
While the outlook for the Bitcoin market is bearish, corrections of up to 40% have been made to altcoins. Ethereum (ETH), Polkadot (DOT) and Binance Coin (BNB) recorded the worst performance in the top 10 with corrections of 42.4%, 36% and 48.1% respectively.
Similarly, Cardano (ADA), Dogecoin, and XRP saw similar corrections. The latter has posted a correction of 13.5% on the daily chart and has been performing the worst over this period.
On higher time periods, the recently added Internet Computer Price (ICP) has the worst performance after falling 56% on the 7-day chart. However, at the time of writing, ICP is showing good signs of a rebound on the 24-hour chart with a gain of 3.4%.
As a result, Bitcoin dominance has rebounded from below 40% to 46.49% at the time of writing. This metric could last and rise for the coming weeks as BTC price action continues sideways and the rebound consolidates around the $ 40,000 area.
BTC dominance is rising on the weekly chart. Source: trade view
Which sectors were hardest hit when Bitcoin fell?
Research firm Messari released a report by analyst Roberto Talamas after BTC cut its price by 40%. The company found that the currency sector (BTC, ETH, ADA, XRP, and others) posted fewer losses than the rest, at 16% overall, closely followed by the DeFi sector, which was down 19%, and decentralized exchanges, at 22%. and the Web3 sector with a 26% loss.
Talamas does not offer a single explanation for the sell-off in the market. Step by step, he pointed out the influence of Tesla’s CEO Elon Musk, possible Bitcoin regulations in the US and China and, in particular, an increase in leverage trading on derivative platforms.
Binance and the other major exchange platforms with the exception of Bitfinex have had positive financing rates in recent months, long positions pay short positions. However, that metric went sideways during the sell-off and was a major catalyst that sparked the $ 30,000 flash crash. Talamas added:
(…) As prices fell, traders kept buying until they triggered the next liquidation cascade, which resulted in prices falling further. One example is FTX (where there is more granular data within a day) – rates were still increasing in the week leading up to the surrender on May 20th.
Bitcoin’s dominance is increasing due to the proportional increase in the correlation between assets. If the price of BTC falls, investors could exit their altcoin positions until there is more certainty in the market. The correlation could be a good indicator to identify the lows of BTC, as Pervalle Global’s CIO Teddy Vallee shared and showed in the graph below:
BTCUSD vs.% of tokens 40% off their 50d high. Mainly used to find washouts. Pretty good historically.
Source: Pervalle Global