Downbeat sentiment in the US equity markets coupled with technical pushed cryptocurrencies lower on Friday. The crypto market capitalization fell nearly 7.5% to $1.83 trillion in the past 24 hours. At that, Bitcoin’s share has risen back above 40% of the total crypto market cap, suggesting the sell-off in altcoins is even more aggressive.
Bitcoin fell to August lows below $38,000 after another failed attempt to overcome the descending 20-DMA, currently at $42,900. The coin is now back below the $40,000 psychological level, which implies that the decline is probably just starting, with much deeper losses lying ahead.
Chances for a reversal are minimal at this point despite bitcoin looking oversold already. Also, the prices have broken below critical support levels. One can expect an acceleration of long positions liquidation in BTC and other digital currencies amid the continued negative tone in the global stock markets.
Should the mentioned lows give up, the largest cryptocurrency by market capitalization will target the $33,000 support zone for the first time since July 2021. Then, the market focus would shift towards the ascending 100-week SMA, currently at $31,400. Meanwhile, BTC bears' critical hurdle is represented by the $30,000 figure.
Next week, bitcoin could stay on the defensive as the dollar will likely advance. At the same time, stocks would fall further ahead and after the Federal Reserve’s two-day meeting that concludes on Wednesday as the US central bank is widely expected to confirm its hawkish tone and signal a March rate hike.