Bitcoin is "vulnerable" amid widespread sell-off in risk assets
By Noemi Jansana / Alejandra Zamora
Date: Wednesday 19 Jan 2022
(Sharecast News) -
Bitcoin joins the global falls in financial markets, especially strong in risk assets, and trades below the $42,000 level, after two consecutive days in which it has closed around $41,500. The world's largest cryptocurrency has fallen almost 10% since the start of the new year, while cryptocurrency funds string five consecutive weeks of outflows.
Despite the fact that the cryptocurrency market is seeing some turmoil, the price remains at the bottom of the channel in which the digital currency par excellence has moved in recent weeks, with clear support at $40,000. However, "it's still struggling to generate any upside momentum," commented Craig Erlam, analyst at Oanda. "It continues to look vulnerable, especially at a time when risk assets are getting hit so hard," he warned.
The news coming out of the cryptocurrency industry is mixed. On the one hand, cryptocurrency funds witnessed the fifth consecutive week of outflows, according to a report from digital asset manager CoinShares, as digital asset investment products recorded net outflows of $73 million in the week ending January 14th.
Meanwhile, El Salvador, the first country to adopt Bitcoin as a currency, has incorporated about 70% of its unbanked population into its official Bitcoin wallet called Chivo, which translates to about 44 million people. On the other hand, Moody's, the credit rating agency, has issued a warning about the risk of downgrading the Central American country's rating because of its adoption of the currency last September, as President Nayib Bukele declared rotoundly, through his Twitter account, that "El Salvador does not care".
As for the rest of the market, Ether, the coin linked to the Ethereum blockchain and the second largest cryptocurrency, plunged more than 2% to $3,104. On the other hand, the price of Dogecoin fell a cent to $0.16, while Shiba Inu lost more than 3% to $0.000028. Similarly, the Binance coin was down 1.5% to $463.
"The daily trend for ETH is treading along an ascending channel pattern. However, a downward breakout from this pattern could see a bearish cycle for Ethereum with the next immediate support at $2,730. Meanwhile, Opensea, the most popular NFT marketplace, acquired Ethereum wallet maker Dharma Labs, a strategic move to further grow the NFT marketplace," noted Siddharth Menon, COO of WazirX.
The performance of other cryptocurrencies was also mixed, as Cardano, Ripple, Polkadot, Tether and Litecoin rushed lower in the last 24 hours, while prices of Solan, Luna (Terra) and Stellar traded with gains. Meanwhile, the global cryptocurrency market capitalization falls to $1.97 trillion.
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