On January 25th, the price of Ethereum dropped below $1,600, as bears, or investors who believe the market will decrease sold off cryptocurrencies that were previously considered overbought. This caused a shift in sentiment in the cryptocurrency market, resulting in a significant decrease in value across the board.
Also, the price of Bitcoin fell below $23,000 as a result of the overall market sell-off. This trend of uncertainty and decrease in value had been present for several days leading up to this point.
On Wednesday, the price of Bitcoin (BTC) dropped below the $23,000 level, as a wave of negative sentiment swept through the cryptocurrency markets. This decline comes after the cryptocurrency had reached a high of $23,048.18 on the previous day, Tuesday. During the early hours of the trading session today, BTC/USD hit an intraday low of $22,406.08.
The price drop caused Bitcoin to reach its weakest point since Sunday, breaking out of a floor at $22,500 in the process. This decline in value suggests that there was a significant amount of selling pressure on the market, likely from investors who believe that the value of the cryptocurrency will continue to decrease in the future.
This drop in value is a significant reversal from the bullish trend that had been present in the cryptocurrency market in recent weeks, where many investors had been buying into the market with the expectation that the value of Bitcoin would continue to increase. The current decline in value is likely to cause concern among investors, as it suggests that the market may be experiencing a correction or a decrease in value after a period of rapid growth.
On Wednesday, the price of Bitcoin (BTC) dropped below the $23,000 level, which was observed on a technical chart as a decline in the 14-day relative strength index (RSI). This decline in the RSI suggests that the market may be experiencing a bearish trend, where investors are selling off the cryptocurrency, causing its value to decrease.
At the time of writing, the RSI index is tracking at a level of 79.93, which is a significant decline from its level just 24 hours earlier, when it was hovering at 85.09. This suggests that the market sentiment has shifted rapidly in a short period.
Despite the initial drop in value, Bitcoin has somewhat rebounded since then and is currently trading at $22,614.62. This rebound in value may indicate that the market is experiencing a short-term correction, rather than a long-term trend of decreasing value.
Ethereum’s social dominance has grown rapidly in the last few days, according to data from Santiment. The on-chain data aggregator suggests that this could be evidence of FUD (fear, uncertainty, and doubt) being behind the dip in Ethereum’s value. Additionally, it’s also possible that profit-taking in large assets such as Bitcoin and Ethereum has been ramping up with the price increase.
Sentiment also highlights this in its post, pointing to the spike in the profit-taking ratio on January 20th. The combination of FUD and profit-taking could be a recipe for disaster for the digital asset. Another event that could have contributed to the dip is that the Wormhole attacker started moving the stolen funds around.
The attacker transferred more than $155 million in ETH to OpenOcean on Monday, which they then used to buy staked ETH tokens like stETH and wstETH. Sell pressure on ETH increased as a result of these coins being dumped on the open market, adding to the momentum’s decline and causing the present decrease in price.
As of this writing, the price of ETH is being traded at $1,555. Despite this, the price has decreased by 5.27% in the last 24 hours. However, it’s worth noting that the trading volume has increased by 11.91% over the same period, currently sitting at $9.32 billion
The decrease in the value of Bitcoin, and Ethereum and the negative sentiment that is currently sweeping through the cryptocurrency market may indicate a turning point in the market, where the trend of increasing value that had been present in recent weeks is coming to an end. It’s important to note that the crypto market is highly volatile and the price fluctuation is normal. It’s always recommended to do your research before making any investment decisions
Ken Emmanuel is a Blockchain Content writer, a Web3 Enthusiast and a Social Media Management Strategist, he likes writing educative contents to help people gain more knowledge and get inspired. The growth of any organization he work with is always his priority. He is a Geographer by profession and loves reading.