Crypto market capitalisation slipped another 1.4% to $1.97trn. Attempts to rebound with a return above the round level faced further pressure in the morning.
Notably, this time, altcoins are falling ahead of the curve.
Bitcoin lost 0.8% overnight, and its share of total market capitalisation rose to 40%. The turning point in the trend was evident at the start of the week. And it means that the crypto market is starting to get scared.
Interestingly, the Crypto Fear and Greed Index remains at 24 - extreme fear - for the second day. These are low levels but do not indicate a worsening of the situation. On the contrary, the index is creeping upwards.
Bitcoin is trading near 41.7k, managed to hold above 40k yesterday despite massive pressure in traditional markets. However, this local support is unlikely to withstand sustained pressure.
Bitcoin is received support this week as investors sold altcoins, favouring the first cryptocurrency. This spillover is reminiscent of a risk-off situation, where the most liquid assets are in demand. Simply put, bitcoin is the crypto safe haven.
But everything is relative. Bitcoin hardly looks stable enough for most investors in it.
The dynamics of bitcoin and ether near $40k and $3k, respectively, are worth keeping an eye on this week. A consolidation below these levels could start the next phase for cryptocurrency markets with higher volatility and accelerating declines in the early stages.