Bitcoin price struggling to stay above water at $30,000

Posted: 28 January 2021 12:35 am
bitcoin price

Bitcoin is losing market share to coins like ETH, UNI and DOT as the price struggles to stay above $30,000 while interest fades.

At the time of writing Bitcoin is changing hands for $31,234, down 1.9% on the day as it faces continued sell pressure.

The premier cryptocurrency has been stuck in the $30,000 – $35,000 corridor for the past week, stuck in a descending wedge since printing a new all-time high around $42,000 on January 9th.

Bitcoin price declining from $42,000 on January 9 to $31,000 on January 28.

Bitcoin price caught in a descending wedge pattern with $30,000 serving as resistance.

Several market events may have contributed to the continued decline such as weakening global stocks, stagnating interest rates in the US and a reduction in search interest of the term “Bitcoin” on Google. On Wednesday Wall Street saw the worst day of trading in months, with the S&P 500 and Nasdaq Composite index both falling 2.6% and indexes across most of Europe down this week. Some have connected the drop with the announcement by the US Federal Reserve on Wednesday to keep interest rates pegged near zero while continuing its bond purchasing program.

According to data from Google Trends, interest in Bitcoin has reduced by two-thirds since January 11, two days after it set an all-time-high price of around $42,000. Interestingly the trendline of search volume demonstrates a cascading pattern reminiscent of the price data (seen above) for the same time period.

How to buy Bitcoin

Bitcoin’s total market share of the cryptocurrency market has also weakened alongside its price, falling from a high of 72.8% on January 3 to 63% at the time of writing. The overall market capitalization of cryptocurrencies excluding Bitcoin has remained strong though, trending upward over the month as several altcoins have picked up the mantle while Bitcoin rests.

ETH, UNI and DOT rise in price and prominence

Ethereum has had a record-breaking start to the year, setting a new all-time-high price of $1,450 and overtaking Bitcoin in daily transaction volume by a margin of 23%. Off the back of this momentum, it has increased its market share of the cryptocurrency market by 4.5% over January. This comes as record-high amounts of Ether leave exchanges, likely destined for staking as ETH 2.0 continues to roll out.

Uniswap, the golden child of the decentralized exchange scene, has risen by 58% this week, despite most other cryptocurrencies showing losses over the same time period. It set a new all-time high today around $15.50 before retracing slightly by the time of writing. According to CoinGecko data, Uniswap is now one of the top 15 exchanges by volume globally, likely due to its prominence and utility within the growing DeFi landscape.

DOT, the native cryptocurrency of the Polkadot blockchain network made waves recently when it “flipped” XRP to become the third-largest cryptocurrency by market capitalization (excluding stablecoin USDT). DOT currently sits at $16.28 having gained 146% in the past 30 days and now accounts for 1.6% of the total market capitalization of all cryptocurrencies. Investors are watching this one closely as parachains gradually roll out, which will bring a token economy to Polkadot, similar to the ERC20 economy on Ethereum.

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, keep your crypto safe with a hardware wallet and dive deeper with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies including at the time of writing

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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