Altcoin sell-off as traders struggle to keep Bitcoin price above $ 40,000

Recent altcoin gains have come under pressure Bitcoin (BTC) price fell to retest lower support levels after hitting a new all-time high of $ 41,940.

After Bitcoin surged above $ 40,000 on Jan. 7, the top cryptocurrency faced selling pressure that brought the price down to $ 36,600. As during the current rally, investors quickly bought in and the price of BTC rose to a new all-time high of $ 41,940 on January 8th.

Market sentiment continues to improve as institutional investors gain access to cryptocurrencies. As reported by Cointelegraph, Michael Sonnenshein, CEO of Grayscale Invesetments, says pension funds have started using the Grayscale fund family to invest in Bitcoin.

Altcoin sell-off as traders struggle to keep Bitcoin price above $ 40,000
Altcoin sell-off as traders struggle to keep Bitcoin price above $ 40,000

CNBC Mad Money hosts, Jim Cramer noted that the surge in cryptocurrencies comes with ongoing pressure from the price of gold. This suggests that the main narrative regarding Bitcoin and digital assets is gradually changing.

While it is difficult to determine how long Bitcoin’s price can maintain its current upward momentum, It is clear that institutional and retail investors are buying heavily with each decline, driving the price to new highs.

Daily performance of the cryptocurrency market. Source: Coin360

Stocks are falling on uncertainty about the next round of stimulus

After reaching new all-time highs on January 7th, The SP 500, NASDAQ and Dow showed less strength today as it became clear that the stimulus packages awaited by US lawmakers still face significant hurdles.

All major indices fell under early selling pressure, but anyone could rally to end the day in the black. The SP 500 closed with an increase of 0.55%. Meanwhile he NASDAQ and DOW finished the day up 1.28% and 0.18%, respectively.

Bitcoin dominance increases as altcoins decline

While Bitcoin has traded in a range between USD 36,660 and USD 42,000 in the last 24 hours, Altcoins are facing increasing selling pressure.

Just before the weekend, selling pressure has increased across the board, indicating the possibility of further pullbacks as the market attempts to establish a new trading range.

When the price of Bitcoin finds support or enters a phase of consolidation, Altcoins tend to rise higher. Hence, traders will be very attentive to BTC price developments.

Daily performance of the Bitcoin price. Source: Coin360

Ether (ETH) is currently down 2.3%, trading at $ 1,194. while Polkadot (DOT) and Stellar Lumens (XLM) fell more than 6% to trade at $ 9.15 and $ 0.289, respectively.

The total market cap for cryptocurrencies is now $ 1.05 trillion, and the dominance rate of Bitcoin is 70.5%.

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