The cryptocurrency market is under a cloud of uncertainty as Bitcoin (BTC) and major altcoins face significant selling pressure, with bulls struggling to reclaim lost ground. As the market continues to grapple with the possibility of further declines, investors are watching closely for any signs of a potential relief rally.
Bitcoin has started the week cautiously, hovering around the $67,500 mark. The cryptocurrency has been unable to break above the $74,508 resistance, a level that has proven to be a significant hurdle. According to CoinShares, the total outflows from crypto investment products have risen to $3.8 billion over the past four weeks, with a notable $133.3 million in outflows from BTC exchange-traded products last week. This trend suggests that investor sentiment remains cautious, and there is a lack of enthusiasm to buy the dip.
Bitcoin’s Bearish Outlook
If Bitcoin closes the month below $79,500, it will mark its first-ever consecutive negative monthly closing in January and February. This scenario could lead to a 22% loss for the first quarter, the worst performance since a 49.7% drop in 2018. Despite the weak performance, Strategy co-founder Michael Saylor remains bullish, indicating that the company is continuing to accumulate Bitcoin, which will be its 99th BTC transaction.
Altcoin Performance
Several major altcoins are also facing strong resistance and bearish pressure. Ether (ETH), Binance Coin (BNB), XRP, Solana (SOL), Dogecoin (DOGE), Cardano (ADA), and Bitcoin Cash (BCH) are all showing signs of struggle. Ether, for instance, has failed to break above the $2,111 level, while BNB is facing resistance at $642. XRP, despite a brief surge, has been pulled back below the 20-day EMA ($1.53).
Solana is attempting to push above the $95 level, but the bears are holding strong, keeping the price within a $76 to $95 range. Dogecoin, which turned down from the $0.12 level, is likely to remain range-bound between $0.08 and $0.12. Cardano’s relief rally has been halted at the 20-day EMA ($0.29), and Bitcoin Cash, while showing some strength, is facing resistance at the 50-day SMA ($578).
Traditional Markets: S&P 500 and USD Index
The S&P 500 Index (SPX) is also experiencing a tough battle, with the bulls and bears clashing at the support line of the ascending channel pattern. The moving averages are on the verge of a bearish crossover, and the RSI is in negative territory, signaling a potential deeper correction to 6,720 and then to 6,550 if the price breaks below 6,780. Conversely, a push above 7,002 could signal a resumption of the uptrend.
The US Dollar Index (DXY) is trading below the moving averages, but the bears have not managed to challenge the 96.21 to 95.55 support zone. A break above the moving averages could lead to a rally toward 99.49 and then to 100.54. However, a sharp decline from the moving averages would indicate continued bearish sentiment and could trigger a further downtrend.
Looking Ahead
The current market environment is characterized by bearish sentiment and cautious optimism. While the technical charts suggest further declines, the long-term outlook for Bitcoin and other major cryptocurrencies remains uncertain. Investors are advised to remain vigilant and monitor key support and resistance levels closely. The coming weeks will be crucial in determining whether the market can find a bottom and start a meaningful recovery or if the bearish trend will continue.
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