DeFi tokens and altcoins move high as Bitcoin price finds resistance near $35,000.
On Jan. 12 Bitcoin (BTC) price rebounded slightly as the price attempted to re-enter the $37,000 range but at the time of writing increased selling is pushing the price back toward the $32,000 mark.
While the bearish price action may have shaken out newer investors who are unfamiliar with Bitcoin’s whipsaw volatility, the recent 28% drop doesnt even maike it on the list of the top-5 worst BTC pullbacks in history. In fact, today’s 20% rebound marked one of Bitcoin’s largest one-day rebounds ever.
Despite Bitcoin’s swift 20% bounce, many analysts have voiced caution, warning that the top cryptocurrency is not out of the woods yet due to a high funding rate in the futures market and the growing strength of the U.S. dollar index (DXY).
Longer-term and institutional-level investors seem unmoved by the correction and likely believe that it is nothing more than a short-term pullback.
Analysts at Goldman Sachs suggested that the recent developments are a sign that “the market is beginning to become more mature,” and that the sector has great potential for growth due to the fact that institutional involvement only comprises 1% of the current market.
Stocks search for support
While Bitcoin and altcoins saw a healthy rebound, the traditional markets continued to face pressure due to the possibility of continued political unrest in the United States and concerns about the economic impact of new COVID-19 restrictions.
Signs of a strengthening dollar are putting pressure on global financial markets worldwide and some analysts have even cautioned that a strong dollar is bad for Bitcoin price.
The main indices were under pressure all day and ended mixed at the closing bell, with the S&P 500 and Dow slightly up 0.04% and 0.19% respectively while the NASDAQ closed down 0.08%
Altcoins show strength as Bitcoin attempts to find a new trading range
Bitcoin now appears to be entering a new range where $30,000 is support and the $35,000 level may act as resistance. As this occurs, select altcoins have moved higher and traders capitalize on BTC’s stability by shifting to altcoins.
The DeFi sector also continued to show strength as Maker’s governance token (MKR) rallied more than 31%. Synthetix (SNX) and AAVE also gained 23% as both rallied toward new highs for the year.
The overall cryptocurrency market cap now stands at $924.5 billion and Bitcoin’s dominance rate is 68.4%.