The broader crypto market has fallen around 1.5% over the last 24 hours, bringing the total market capitalization down to $1.65 trillion. Bitcoin and Ethereum, the two largest cryptocurrencies, are down 1.5-2% and trading under $42,000 and $2,500 respectively.
However, some altcoins like Chainlink have been hit harder, with LINK falling roughly 6% even while most other major altcoins are down a more moderate 2-5%.
Crypto market analyst Altcoin Sherpa provided some insight into Bitcoin’s technicals: “$BTC: #Bitcoin trading under the 200 EMA on the 4h for the first time since October 2023. Let’s see if this is a deviation or if there’s more pain to come.”
The 200 EMA refers to the 200-period exponential moving average, a widely followed indicator. Falling below this key moving average line could signal a change in market momentum and more downside for Bitcoin in the short term.
Popular analyst Rekt Capital also offered a reassuring longer-term perspective, suggesting any retracement here could be similar to past pre-halving drops, tweeting: “Bitcoin will retrace deep enough to convince you that the Bull Market is over And then it will resume its uptrend.” As a reminder, the next Bitcoin halving event is expected in April this year. Historically Bitcoin has tended to decline ahead of these events before resuming its bull run afterwards (link to our previous coverage).
Finally, the relative strength index (RSI) reading for the total crypto market cap daily chart recently hit 29. An RSI below 30 is generally considered oversold territory, signaling investor panic and capped losses in the near future as buyers step back in. However oversold conditions can persist for some time in bearish markets.
So in summary, a minor crypto retreat today follows strengthening signals of short term capitulation. However analysts urge caution around whether this marks the end of the recent multi-week sell-off, or if lower supports could still be tested from here. As always we recommend using any continued weakness to accumulate positions in fundamentally strong crypto assets.
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