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Bitcoin market dominance grow amid widespread cryptocurrency collapse

  • Bitcoin recovered from Asian lows but failed at $3,400.
  • Investors sell altcoins, driving Bitcoin’s market share higher.

Bitcoin settled at $3,390 after a failed attempt to recover above $3,400. While the cryptocurrencies have calmed down after the recent collapse to 15-month lows, the bearish sentiments are still dominating the market. The SEC’s decision to postpone ruling on Bitcoin ETF triggered another wave of panic selling. As altcoins were hit the hardest, Bitcoin’s market share jumped to 55%. 

Meanwhile, another batch of statistical data reveals that the number of short positions in Bitcoin jumped to 6-week high and exceeded 37,000 on Hong Kong-based exchange Bitfinex. Moreover, the number of shorts did not move below 35,000 even when BTC/USD tried to recover from deeply oversold levels and touched $4,400. This setup implies that bears control the situation on the market, while the recovery attempts are likely to be short-lived and shallow.

Bitcoin’s technical picture

Harami pattern on 4-hour chart indicates that a bearish market may be reversing. The signal is confirmed by the Relative Strength Index (RSI) that has reversed from the oversold territory. Zooming in to 1-hour chart, we can see that RSI is also reversing to the upside. However, the price needs to recover at least above $3,670 (SMA50, 1-hour) to mitigate the immediate bearish pressure. Once this area is cleared, the upside may be extended towards $3,800 with SMA100, 1-hour on approach ant $4,000.

On the downside, $3,300 is the critical support level that stopped the decline during early Asian hours. A sustainable move lower will bring $3,174 (weekly SMA200) and $3,000 into focus.

BTC/USD, 4-hour chart

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