The cryptocurrency fear and greed index was down to 11 on Sunday and slightly up to 13 by early Monday. Crypto market capitalization lost another 1.1% overnight to $1.61 trillion, the lowest since August.
As is often the case with prolonged sell-offs, altcoins are falling with acceleration to the first cryptocurrency, causing Bitcoin's share gains, which already stand at 41.3% against lows of 39.3% in mid-January.
Bitcoin's share of 40% seems like a turning point, twice triggering a correction in the crypto market. This level stood like an informal threshold that optimism about altcoins had gone too far.
However, the rise in bitcoin's share does little to help its price. On Monday morning, we saw the sixth consecutive bearish daily candlestick, and the price rolled back to $35K.
The bears may well be able to sell the price down to $32.5K, closing the gap of July and returning the rate to last summer's support area.
Alarmingly, the sharp reversal on Friday was not followed by any meaningful bounce. Some observers point out that this is a worrying signal, suggesting further market declines, as we have not seen a final capitulation.
Without capitulation, the markets will remain with an overhang of sellers. The price of Ethereum has fallen to $2400, which is less than half of its peak price in November.
Events are developing in a bearish scenario, so far broadly repeating what we saw in 2018 in terms of overall sentiment. Long-term buyers can avoid buying at prices above $30k for bitcoin and $2k for ether.
We believe long-term investors will look out for purchases in the $20-$30k per bitcoin area. Whether these purchases will be at the upper or lower boundary depends, among other things, on the situation in the stock markets.
The return of buyers there will support the demand for risk among institutional investors. But as long as we see only steady selling from them, it is too early to talk about buying.