Rival coins such as Ethereum and Ripple Labs' XRP, along with smaller alt-coins Litecoin and Cardano, sagged after several days of heightened volatility. With over 1.3 million active Bitcoin addresses, the number of investors continues to grow. In total, Coinbase processed over $9.5 billion in crypto trades on Monday, an all-time high for the exchange.
Daniel Moss, a strategist at DailyFX, wrote that the cryptocurrency market has been under fire over the last few days, with "Bitcoin and Ethereum both sinking lower as a wave of risk aversion sweeps across global financial markets".
As Coinbase prepares for its IPO, the exchange broke its daily volume record.
The price of bitcoin has fallen from a new all-time high near $42,000 to $34,500 and is now trading at a key technical level that could define whether its uptrend has reached a top, or whether there's more upside for BTC. Clearing that may pave the way for a push back towards former resistance-turned-support at the 2017 high ($US19,891), Moss said. Each level is associated with a percentage based on how much of a prior move the price has retraced.
The Bitcoin price is nearing a key Fibonacci retracement level.
Chris Svorcik, a technical analyst who writes for FXEmpire, was quoted as saying BTC needs to stay above $29,762 - the half-way point between its December 11 low and its January 12 high - to avoid a drop toward the $26,000 mark. The investor frenzy has also benefited other exchanges. The price rattled to a three-year high at $US1,350 late on Sunday, but its decline since then means it has now surrendered over half of the gains made since the start of 2021, leaving it hovering at a key Fibonacci retracement level.
"Support from the broader market would be needed, however, for Ethereum to break back through to $US1,100 levels", he said, adding: "In the event of an extended crypto rally, Ethereum could test resistance at $US1,250 before any pullback. The second major resistance level sits at $US1,212".