We are witnessing a heavy decline in Bitcoin that drags the entire crypto market with it and the market cap has dropped to around 900 billion dollars. Bitcoin these days seemed to have found its balance in the $ 34,000 and $ 37,000 range but in the last 24 hours it has faced a deep dip hitting $ 29,000 and then bouncing above $ 30,000. There is currently BUY resistance in the $ 29000 zone but if it breaks down it could go down a little bit.
I have often talked to you about the Crypto Fear & Greed Index, a market indicator that records investor sentiment and you have to read it backwards to understand how to move on the market.
At the moment the index is 40 and it means that the sentiment of the average investor is negative, he is afraid of losing his investment and therefore wants to sell. The big fish are often the cause of these deep drops, and they do so to obtain liquidity and buy more BTC at lower prices. This is the game of the market, emotions must be kept aside. The Crypto Fear & Greed Index is back to the same as it was in October and do you remember what happened in November? Well, none have the foresight to guarantee you that things will turn out this way but the market is systemic and all signals are well known.
As evidence of what has just been written, MicroStrategy took advantage of the discounts to buy another 314 BTC in the area of ??$ 29,000, for a value of about 10 million dollars, to bring its total treasury to 70,784 BTC. The strategy is always the same and the reaction of small investors does not stop: creating panic is an excellent move to increase your investment without losing more capital.
That said, this is a great opportunity for altcoins to gain ground and continue that bullish movement that has been thrilling us over the past few weeks! In fact, the market is responding to this with the altcoins almost all up by a few percentage points. The dominance of Bitcoin is still very high, currently at 64%, and it is necessary to start decreasing it by increasing the market cap of all other cryptocurrencies. I believe that this will be the movement that will characterize this 2021, Bitcoin will grow again but the distance from all other cryptocurrencies will be reduced and consequently the dominance will decrease. It would be an excellent result if dominance settles at 40% by this summer and 30% by the end of the year.
These are just my humble thoughts and nothing prevents Bitcoin from reaching 90% dominance by the end of the year but, based on what I read and investor sentiment, I hope to guess the odds!
