Crypto Market Cap Falls $ 113 Billion As Bitcoin Price Falls To $ 28,750

On January 21, the cryptocurrency market saw a wave of heightened selling pressure and in the last hour the price of Bitcoin (BTC) fell below $ 30,000 for the first time since 4 January.

Now that Bitcoin has lost the $ 32,000 and $ 30,000 support, a growing number of analysts are suggesting that the price may test the $ 24,000 support again. A theory behind the decline suggests that institutional investors viewed Bitcoin as a crowded trade and decided to take a profit.

As reported by Cointelegraph, Scott Minerd, Guggenheim’s chief investment officer, recently suggested that the price of Bitcoin has “probably set a high” for 2021 and could see a “retracement towards the 20,000 level.”

JPMorgan strategists John Normand and Federico Manicardi also warned that investors using BTC “as a portfolio diversifier are putting themselves at risk” because Bitcoin is more of a cyclical asset than a hedge.

This warning appears to have been made at the right time given today’s volatility. While liquidations can be painful for over-leveraged investors, a closer look at some of the social activity that took place during the downward movement suggests that the current volatility may not be a macro trend change.

In private comments with Cointelegraph, TheTIE analyst Erik Saberski noted that during previous declines in the price of Bitcoin, “its dominance of market cap has not really changed.

Saberski said:

“This implies that at the start of the month sales were fully realized, while recent BTC sales are shifting more to other cryptos. Looking at daily sentiment, the same recent drops * generally * have corresponding drops in sentiment. We don’t see that at the moment.

Stimulus hopes keep stocks near highs

Traditional markets continue to be boosted by the prospect of a massive stimulus package from the Biden administration.

The S&P 500 and NASDAQ both hit new all-time highs on January 21, closing 0.03% and 0.82% respectively. The Dow Jones also ended the day with a gain of 0.04%.

Of the first 100 coins, the only project with noticeable gains was CELO, which earned $ 48.87 and is trading at $ 3.37. Ether (ETH) corrected by 21.28% and Polkadot lost 8%.

The overall cryptocurrency market cap now stands at $ 871 billion and Bitcoin’s dominance rate is 64.3%.