As Bitcoin Stays Below $100K, Altcoin Sell-Off Intensifies
Bitcoin recently surpassed $101,000, reigniting excitement among investors, but quickly retreated and dropped to the $98,000 level today. Following strong inflows into spot Bitcoin ETFs in the U.S., the cryptocurrency finally reached the six-figure price level that had been targeted for weeks. Last Thursday, Bitcoin reached an all-time high of $103,896, with an increase of approximately $8,000 in one day.
However, in the subsequent days, market sellers swiftly intervened to prevent Bitcoin from gaining further value. A significant wave of sell-offs led to Bitcoin losing over $10,000 in value within just a few hours. This situation caused widespread liquidations in the market. Although Bitcoin attempted to recover on Friday and over the weekend, trending towards $102,000, it ultimately closed the week at $101,100. Despite a positive weekly close, selling pressure returned in the new week, and Bitcoin dipped down to the $98,000 mark today.
Altcoins are also retreating. While many altcoins achieved impressive gains over the weekend, these gains were partially reversed today. Among the top 10 cryptocurrencies, ADA, XRP, and DOGE have shown the worst performance on a daily basis. Many high-market-cap altcoins also saw losses exceeding 5% today. ETH, BNB, and AVAX experienced relatively less depreciation compared to Bitcoin.
The selling wave observed at the beginning of the week caused the total market capitalization to decline by an average of 3%, falling to $3.56 trillion. While Bitcoin is striving to maintain levels above $100,000, attention in the market has recently shifted toward Ethereum. Some analysts have likened Ethereum's technical outlook to the structure seen before the major rally in 2021. BlackRock's (BLK) increase in Ethereum investments and the acceleration of institutional capital flows are reinforcing Ethereum's potential.
After testing the $4,000 level over the past three days, Ethereum retreated to around $3,850 today amid the overall market decline. Conditions of excessive risk appetite continue in the market. The Cryptocurrency Fear and Greed Index, which is used to measure market sentiment, dropped to a level of 78 today; however, this level still falls within the "Extreme Risk Appetite" zone. This indicates that the market has become overly optimistic and caution is warranted for potential corrections.
On the other hand, Bitcoin's market dominance has fallen below 55% for the first time in months, triggering rumors of an "altcoin season." Finally, Trump's plans to appoint David Sacks, a crypto-friendly figure, as the new Crypto and AI Czar have been met with enthusiasm in the market. David Sacks is involved in a struggle referred to as "Operation Choke Point 2.0," which is associated with the behind-the-scenes processes of cryptocurrency regulations. The closure of Silvergate Bank is being cited as part of this operation.