Bitcoin, Ethereum Dip Below Key Psychological Footholds

Key Takeaways

Bitcoin and Ethereum both tumbled below key technical and psychological levels earlier today.
While the two largest digital assets have since recovered some of their losses, most of the market has been suffering from bearish price action.
Approximately $1 trillion has been slashed from the total cryptocurrency market cap since November.

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The two most dominant crypto assets have been shedding points for weeks since reaching all-time highs in November. Today, however, they both dipped below key psychological levels. 

Psychological Resistance

Almost all of the cryptocurrency market has been weak lately. Few have been spared.

Bitcoin and Ethereum briefly wicked below the $40,000 and $3,000 levels, respectively, today. BTC fell to roughly $39,692 and ETH hit levels as low as $2,922.

The price levels breached today have served as significant areas of both support and resistance over the past year, and major whole numbers like these also can act as important psychological benchmarks.

Nevertheless, each asset bounced back roughly two percentage points since today’s most recent lows, sitting at approximately $41,497 and $3,042 at press time. Bitcoin hit its all-time high price of just over $69,044 exactly two months ago today, meaning that today’s prices represent a near 40% crash for the world’s first cryptocurrency. Ethereum also hit its all-time high on Nov. 10, according to CoinGecko, at a price just north of $4,878, with today’s prices representing a roughly 37% decline. 

Coins with lower market capitalizations fell in tandem with BTC and ETH. Solana, the fourth largest cryptocurrency by market cap, got below the $130 level, but has since recovered with BTC and ETH to around $136. It is down roughly 4.5% on the day and 22.5% on the week. Cardano and Polkadot, other prominent Layer 1 Ethereum competitors, are also down roughly 4.5% on the day since recovering from today’s earlier price shock. 

The same is true of the two largest meme coins, Dogecoin and Shiba Inu—each also down approximately 4.5% since recovering alongside BTC and ETH.

Neither have Metaverse nor gaming tokens been spared, with Decentraland’s MANA and The Sandbox’s SAND token down approximately 6.4% and 7.2%, respectively. Axie Infinity’s AXS token is down around 4%. 

Most of these assets are down double-digit percentages on the week, as well. While there are few exceptions to the price depression seen over the last week, Cosmos’ ATOM and NEAR are among them, up about 2.4% and 8.4% today, respectively. 

Overall, cryptocurrency markets have suffered for the last two months. In fact, the total cryptocurrency market capitalization has fallen by roughly a third since its all-time highs of over $3 trillion in November. 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, DOT, ADA, and several other cryptocurrencies. 

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