- News of Omicron triggers bloodbath in the crypto market; Bitcoin price plunges as the asset loses its grip.
- Bitcoin sees a lengthening of cycles due to a growing market cap and lower ROI per cycle.
- El Salvador buys 100 more Bitcoins amid the sell-off, despite IMF warning.
- Bitcoin Fear and Greed Index indicates fear among market participants, indicating a rise in selling pressure on BTC.
The market capitalization of the overall crypto market dropped in response to the news of Omicron. Bitcoin price dropped below $55,000, and the selling pressure on the asset increased on spot exchanges.
Bitcoin price struggles to recover from recent price drop as selling pressure increases
When the news of the new Covid strain broke out, Bitcoin price suffered a drop below $55,000. As investigations begin, governments around the world are tightening travel restrictions and issuing warnings.
Stock markets and cryptocurrencies have noted a potential drop in market capitalization and interest from traders. Bitcoin proponents claim that the asset is considered a hedge against volatility in traditional markets; however, the BTC price drop raises concerns about the asset’s role in investor’s portfolio.
The correlation between Bitcoin and US tech stocks recently turned negative after a consistent rise since the beginning of 2021. Bitcoin price is under selling pressure as this reduces the cryptocurrencies usefulness as a hedge against volatility.
Interestingly, the current cycle is likely to be longer than the previous ones as the asset’s market capitalization has crossed $1 trillion. This indicates a lower ROI per cycle or a longer cycle.
Trader sentiment on Bitcoin has turned to “Fear” on the “Fear and Greed Index.” The index is considered an indicator of traders’ outlook on the asset. “Fear” indicates that there is increased selling pressure on the asset.
Amidst the current sell-off, El Salvador has accumulated 100 more Bitcoins. International Monetary Fund (IMF) had issued a concluding statement asking El Salvador to reduce its BTC holdings; despite that, the country continues BTC accumulation.
FXStreet analysts have evaluated the BTC price trend and predicted that the asset is heading to $53,000 to collect liquidity.