Bitcoin (BTC) has continued its downward trend, falling to around $93,900 as U.S. stock markets closed on Monday. This represents a 1.9% drop in the past 24 hours, adding to the cryptocurrency’s recent woes. The decline isn’t isolated, reflecting a broader bearish trend impacting the entire cryptocurrency market, exacerbated by struggles in traditional financial markets.
Following last week’s major declines, an attempted rally by major U.S. stock averages faltered Monday afternoon. The Nasdaq closed down another 1.2%, and the S&P 500 fell 0.5%, further contributing to the negative sentiment spilling over into the crypto markets.
Ether (ETH), the second-largest cryptocurrency, has also suffered significant losses, down 5.9% over the same period. The CoinDesk 20 Index, which tracks the performance of the top 20 cryptocurrencies, has similarly fallen by 5.1%, highlighting the widespread nature of the downturn.
SOL the worst performer in same period
Among the major cryptocurrencies, Solana (SOL) was the worst performer, plummeting nearly 10% in the past 24 hours and a staggering 41% over the past month. Several factors contribute to SOL’s sharp decline. It appears to be caught in the undertow of a fading memecoin craze. Additionally, SOL faces upcoming token unlocks in March and a 30% increase in SOL inflation due to the recent implementation of SIMD-96, which adjusted the network’s fee structure. At $151 at press time, SOL has now more than given up its post-election gains.
Interestingly, Bitcoin’s price drop comes despite a major purchase announcement from MicroStrategy. The company revealed it had acquired an additional 20,356 BTC, valued at approximately $1.99 billion. This substantial investment, typically a bullish signal, has so far failed to buoy the price.
Market analysts are now tempering expectations for Bitcoin’s near-term performance. Some suggest that the cryptocurrency may not reach new all-time highs within the next three months, and could potentially remain below previous record levels for up to a year.
Possible future declines
Indicators point to weakening momentum for Bitcoin, suggesting the possibility of further price declines. The Relative Strength Index (RSI), a key momentum indicator, currently indicates oversold conditions. However, its continued downward trajectory reinforces the weak momentum and suggests that the selling pressure may persist.
Key price levels are now in focus. A daily close below the $93,000 support level could trigger further drops, potentially accelerating a decline towards the $90,000 mark. Conversely, a strong and decisive move above the $97,500 resistance level could signal a resurgence of buying interest and potentially halt the current slide.
While the recent price action indicates that Bitcoin is facing significant headwinds, the inherent volatility and unpredictability of the cryptocurrency market cannot be ignored. As such, investors are advised to exercise caution and conduct thorough research before making any investment decisions. The current market conditions underscore the importance of understanding the risks associated with cryptocurrency investments.
Shogun Lin
