Bitcoin has continued its descent towards $40,000 proving that the reversal was only temporary. While there is not enough to rule out another recovery, the current trend does point to more downside before the digital asset can find its footing and recover above $44K. This hard-fought resistance point that the cryptocurrency had managed to beat is becoming more and more elusive.
The decline is also apparent in the market dominance of the digital asset. Bitcoin which maintains a majority share of the crypto market continues to see fierce competition from other digital assets. As investors have moved towards altcoins for the gains, so have the market share gone with them.
Bitcoin Market Dominance Declines
Bitcoin had started out the year 2022 on a low note. It had been a hard month for the digital asset by that point and the effects from the December crash were still being felt across the market. Not only had the price of the digital asset taken a hit, but its market dominance had also suffered too, which saw it drop below 40% for the first tie in over six months.
It had quickly recovered after that but not by much. It had bounced up to a high of 43.46% at the beginning of the week following the market recovery. This would prove to be short-lived as altcoins once again mounted fierce competition. Networks like Ethereum and Solana lead the charge with a wide range of DeFi and NFT offerings.
Bitcoin’s dominance quickly dropped after that. Crashing from its peak of 43.46% to its current position at 42.51%.
BTC dominance declines to 42% | Source: Market Cap BTC Dominance on TradingView.com
BTC still retains the majority dominance of the market despite this decline. The pioneer cryptocurrency is still a market leader and its movements on the charts are closely mirrored by altcoins in the space.
Losing Footing At $44K
Bitcoin at 44K is an important price point for the asset. It may not signal that the bull rally has returned but it does show significant movement towards the $45K-$46K mark that would mark another entrance into the bull market. Even though the asset had traded above 44K for the better part of yesterday, the early mornings of Thursday saw it lose $2,000 to crash to the low $42,000s.
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This has caused a decline in the strength of the digital asset given that it is now only trading above the 20-day moving average. With the value under the 50-day moving average, it signals a move of strength in favor of the bears.
A close below the 50-day SMA could see bitcoin decline above $40,000. While still a significant price point, there is not enough support for BTC below this point. The next support level lies at $42,027 with major resistance mounting at $44,767.
Featured image from MARCA, chart from TradingView.com