Bears In Control As Cryptocurrency Market Turns Lower

The broader cryptocurrency market came under pressure on the second trading day of 2020, as Bitcoin and other major cryptocurrencies slipped into negative territory for the month.

The first cryptocurrency fell back towards $7,050 after being rejected from its 200-period moving average on the four-hour time frame.

BTC/USD shorts on the Bitfinex trading exchange were at their highest level since Dec 20, while BTC/USD longs were at their weakest since Dec 16

Bitcoin Cash tested towards $200 and is currently the worst performer inside the top 5 with losses of around 2.5%, while Bitcoin SV was the biggest loser inside the top 10, and traded down by around -3.5%

The total cryptocurrency market capitalization is currently $184 billion as measured by TradingView, a loss of $2 billion since Jan 1.

Bitcoin has slipped back under the $7,100 support level and remains vulnerable to further losses while trading below the $7,250.

Despite the recent decline, bullish reversal patterns on the lower time frame highlights that a rally towards the $8,000 and beyond remains possible while the December low, around $6,450, holds firm.

Looking at the downside potential for BTC/USD, a bearish break under the $7,000 could trigger heavy BTC/USD technical selling towards the $6,780 support level.

Total Market Capitalization

The daily chart of the total market capitalization is looking increasingly bearish while price trades below the $187 billion level.

The lower time frames show highlight that the $180 billion support level remains a possible downside target while price trades under the $187 billion level. 

A recovery towards the $207 billion level is required to ignite a bullish reversal pattern with substantial upside potential. The reversal pattern highlights the $230 billion level as a possible upside target.

Overall Sentiment

According to the latest data from The TIE, sentiment toward the cryptocurrency market is neutral, at 46 percent.

Bitcoin Cash has the strongest sentiment among the top 10 at 66 percent. Meanwhile, Tezos has the weakest at 37 percent.

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