Altcoins sell off as traders crowd to keep Bitcoin price above $ 40,000

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Altcoin’s recent gains have come under pressure as Bitcoin (BTC) price fell to retest lower support levels after hitting a new all-time high at $ 41,940.

After Bitcoin’s push over $ 40,000 on Jan. 7, the top cryptocurrency faced selling pressure that saw the price drop to $ 36,600. As during the current rally, investors quickly bought the decline and BTC price rose to a new all-time high of $ 41,940 on Jan. 8.

Market sentiment continues to improve as institutional investor inflows into cryptocurrencies continue to rise. According to Cointelegraph, Michael Sonnenshein, CEO of Grayscale Invesetments, has started leveraging the Grayscale family of funds to invest in Bitcoin.

Jim Cramer, host of CNBC Mad Money, pointed out that the surge in cryptocurrencies comes with ongoing pressure from the price of gold, suggesting that the mainstream narrative about Bitcoin and digital assets is gradually shifting.

While it is difficult to determine how long Bitcoin price can maintain its current upward momentum, it is clear that institutional and retail investors are buying heavily with each decline, driving the price to new highs.

Daily market performance in cryptocurrencies. Source: Coin360

Equities are falling on uncertainty about the next round of economic activity

After reaching new all-time highs on Jan. 7, the S&P 500, NASDAQ and Dow showed less strength today as it became clear that the stimulus package anticipated by many US lawmakers continues to face significant obstacles.

The major indices all fell under early selling pressure, but everyone recovered to end the day in the black. The S&P 500 closed the day up 0.55% while the NASDAQ and DOW ended the day up 1.28% and 0.18%, respectively.

Bitcoin dominance increases with the withdrawal of altcoins

While bitcoin has traded between $ 36,660 and $ 42,000 in the past 24 hours, altcoins are facing increasing selling pressure.

With the beginning of the weekend, selling pressure has increased across the board, suggesting the possibility of further pullbacks if the market wants to establish a new trading range.

When bitcoin price finds support or enters a consolidation phase, altcoins tend to rise higher, so intraday traders like to keep a close eye on BTC price movements.

Bitcoin daily performance. Source: Coin360

Ether price (ETH) is currently down 2.3%, trading at $ 1,194, while Polkadot (DOT) and Stellar Lumens (XLM) are both down more than 6% and are trading at $ 9.15 and $ 0.289, respectively traded.

The market cap for cryptocurrencies is now $ 1.05 trillion, and Bitcoin’s dominance rate is 70.5%.