A Long Way Down

Chart of the Day

The sluggish start to the new year has taken a turn for the worse. BTC has failed to stabilize at the $43k level after yesterday's sell-off, and as a result, has since plunged through several resistance zones before eventually setting near the $41.2k level that it is currently trading at. Although the on-chain UTXO-realized price distribution does point toward an immediate price wall at the $40k level, it is not a particularly strong one. Additionally, the price buckets within the $30k and $40k range are rather scattered, meaning that BTC will have a higher chance of descending into a free fall if it were to drop below the $40k level, as there will then be much fewer on-chain support levels in that region to hold it. It is not just BTC that is suffering. Major altcoins like ETH are negatively affected to a great extent too. As of the time of writing, the second-largest cryptocurrency by market cap is down by more than 7% within the last 24 hours. Even the stronger L1 tokens that were quick to bounce from yesterday's sell-off are once again finding themselves in the red. Unsurprisingly, the Crypto Fear & Greed Index has dropped to its lowest level since July 2021, indicating that the crypto market is currently plagued by extreme fear. It looks like this climate of fear is here to stay (at least in the near term), as many analysts are expecting the price volatility to remain elevated throughout the whole of this month.