The plunge in the price of Bitcoin also sent a ripple effect down many altcoins.
The broad digital currency industry is taking a beating from the bears as Bitcoin (BTC) price slid to its lowest resistance level around $55,705.18, driving other altcoins along with it. The fall which has been in the piping for much of this week was unprecedented as no clear-cut fundamentals were responsible for the sell-off.
The Bitcoin bulls were quick to defend the $55,000 support level, knowing that a breach below this level can send the price of Bitcoin back to the $50,000 to $52,000 range as many HODLers may FOMO out of the market to preserve their capital. The premier digital currency is now changing hands at $57,066.64, down 4.13% in the past 24 hours.
“The bears will be growing in confidence,” Matt Blom, head of sales and trading for the digital-asset firm Eqonex, wrote Thursday in a newsletter. “Their continual probing of lower levels has so far failed to prove successful, but one close below $58,850 will increase their confidence and prices will move down to $56,670.”
The fall in the price of Bitcoin is not a yardstick for a non-performing market. Infact, the broader global economy continues to brandish the necessary fundamentals that can favor the growth of the digital asset. The US Government recently signed the infrastructure bill, billed to be financed by trillions of dollars in fiat. This is bound to awash the economy with more Dollar notes that can further help spike the current inflation rate.
By default, market investors are expected to take a position in Bitcoin as well other safe-haven assets such as Gold. However, the current sell-off can be attributed to demands from governments to tax crypto gains and transactions with the US, Argentina, Norway, and South Korea prominent with these resolutions.
Bitcoin Resistance, an Uplift for Altcoins
As expected, the plunge in the price of Bitcoin also sent a ripple effect down the hoard of altcoins. The ability of Bitcoin bulls to defend the psychological level has helped some of the altcoins to recover from intraday lows.
Ethereum (ETH) plunged as low as $3,959.23 in the heat of the massive correction and has recovered back to $4,160.33, down 1.05% at the time of writing. Binance Coin (BNB) also fell drastically to $518.42, its lowest price in a week, while Solana (SOL) plunged to $187.67, a price point that broke the Ethereum-killer’s streak after a bullish run-up to an All-Time High (ATH) of $260.06 in the previous week.
Not all altcoins experienced the damning downturns as Avalanche (AVAX) currently ranks as the biggest gainer amongst the top 20 digital currencies. The coin is trading at $107.24, up 4.99% in the past 24 hours as it maintains a bullish 26.05% growth in the past week, in comparison with BTC and ETH which are down by 10.93% and 10.65% in the trailing 7-days respectively.
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