The seven-day rally that put Bitcoin close to $39,000 has ended unfortunately for cryptocurrency investors. The price of the first cryptocurrency dropped closer to $37,000 as the market plunged after the weekend was over.
Bitcoin's hollow price increase
While the market felt the first signs of relief during the slight price recovery, it was notable that the short-term pump was taking place with almost no volume or open interest behind it. According to derivatives market data, traders are not rushing to open new positions as OI remains relatively low.
The only candle that was followed by a strong volume increase was Jan. 24 when Bitcoin rapidly jumped from $32,000 to $36,220 in a matter of hours. According to the chart data, the asset has reached the trend resistance line that currently remains at approximately $38,220.
As the volume indicator suggests, traders are still avoiding the market ahead of the U.S. market opening, which is usually followed by a volume spike on both spot and derivatives crypto markets.
Panic is still around
As U.Today previously reported, the cryptocurrency market remained in deep panic as the main sentiment indicator—Fear and Greed index—has reached "Extreme Fear" once again.
The altcoin also remains under pressure after the situation around Wonderland DAO co-founder Sifu appeared to be related to the scandalous QuadrigaCX crypto exchange that went down, with one of the developers disappearing with approximately $160 million worth of funds.
At press time, Bitcoin trades at $37,110 following a slight recovery from the lowest point of the day: $36,702.
Vladislav Sopov
Dan Burgin