Altcoins sell-off as traders jostle to hold Bitcoin price above $40K
Altcoin’s recent gains have come under pressure as Bitcoin (BTC) price dropped to retest lower support levels after reaching a new all-time high at $41,940.
Following Bitcoin’s Jan. 7 push above $40,000, the top cryptocurrency faced selling pressure that saw the price dip as low as $36,600. As has been the case throughout the current rally, investors quickly purchased the dip and BTC price rallied to a new all time high at $41,940 on Jan.8.
Market sentiment continues to improve as institutional investor inflow to cryptocurrencies continues to rise. As reported by Cointelegraph, Grayscale Invesetments CEO Michael Sonnenshein says that pension funds have begun to utilize the Grayscale family of funds to invest in Bitcoin.
CNBC Mad Money host Jim Cramer pointed out that the rise of cryptocurrencies comes as the price of gold continues to face pressure, indicating that the mainstream narrative regarding Bitcoin and digital assets is beginning to shift.
While its difficult to ascertain how long Bitcoin price can maintain its current bullish momentum, it is clear that with each dip, institutional and retail investors are vigorously purchasing and pushing the price to new highs.
Daily cryptocurrency market performance. Source: Coin360Stocks fall following uncertainty about the next round of stimulus
After setting new all-time highs on Jan. 7, the S&P 500, NASDAQ and Dow showed less strength today as it became clear that the stimulus bill many were expecting from U.S. lawmakers still faces significant roadblocks.
The major indices all fell under early selling pressure but each was able to mount a recovery to close the day in the black. The S&P 500 closed with a 0.55% gain, while the NASDAQ and DOW ended the day up 1.28% and 0.18% respectively.
Bitcoin dominance rises as altcoins pullback
While Bitcoin has traded in a range between $36,660 and $42,000 over the past 24-hours, altcoins are facing increasing sell pressure.
As the weekend approaches, the selling pressure has begun increasing across the board, indicating the possibility of further pullbacks as the market looks to establish a new trading range.
If Bitcoin price finds support or enters a consolidation phase, altcoins tend to move higher, so intra-day traders will likey keep a close eye on BTC’s price action.
Bitcoin daily performance. Source: Coin360
Ether price (ETH) is currently down 2.3% and trading at $1,194, while Polkadot (DOT) and Stellar Lumens (XLM) both dropped more than 6% and are trading at $9.15 and $0.289 respectively.
The overall cryptocurrency market cap now stands at $1.05 trillion and Bitcoin’s dominance rate is 70.5%.