(Kitco News) - The cryptocurrency market got the week off to a rough start as prices tumbled in the early trading hours on Monday, resulting in the total market cap briefly dipping back below $1 trillion.
Bitcoin (BTC) bears managed to overwhelm bullish support at $21,000 during the early morning sell-off, which dropped the top cryptocurrency to a daily low of $20,898 before reinforcements arrived to bid it back above $21,200.
BTC/USD 4-hour chart. Source: TradingView
Following the recovery, BTC is now trading flat on the day as noted by Jim Wyckoff, senior market analyst at Kito, who stated “Bitcoin-U.S. dollar prices are near steady in early U.S. trading Monday” in his morning brief.
According to Wyckoff, “Bears have the near-term technical advantage as a two-month-old price uptrend on the daily bar chart has been negated. Bulls this week are working to stabilize the market after the recent selling pressure.”
200-week moving average
All eyes are now on Bitcoin’s 200-week moving average (MA), a key level that has historically provided insight into where the bear market will bottom out.
Monday’s dip took BTC 8% below the 200-MA according to market analyst Rekt Capital, who posted the following chart noting that “Historically, $BTC tends to decline -14% to -28% below the 200-MA.”
BTC/USD 1-week chart. Source: Twiter
For those worried that this suggests further downside is in store, Rekt Capital helped put those concerns at ease by pointing out that “BTC already declined -21% below the 200-week MA in mid-June which was very much in line with historical numbers.”
As for now, all eyes are on the U.S. dollar, which is once again surging higher and putting pressure on risk assets, as highlighted in the following tweet from independent market analyst Michaël van de Poppe.
All eyes are on the $USD to break beneath 108 points again, as we've got a fake-out.
— Michaël van de Poppe (@CryptoMichNL) August 22, 2022
Otherwise, trend contains and risk-on will have more pain. pic.twitter.com/l8FS7VuKQC
Pan sell-off
Overall, the crypto market experienced a pan sell-off on Monday, with relatively few tokens spared from the downturn as even stablecoins traded slightly in the red.
Daily cryptocurrency market performance. Source: Coin360
The few bright spots that do exist include XYO, which put on a gain of 19.94% in the face of the widespread weakness, while Energy Web Token (EWT) gained 12.24% and EOS (EOS) climbed 9.93%.
The overall cryptocurrency market cap now stands at $1.01 trillion, and Bitcoin’s dominance rate is 40.4%.
