The Bitcoin price continues to trade below $22,500 for the fourth day in a row after the drastic price decline in the early days of March. While Star Crypto tries very hard to keep price levels above the support zone, the bearish action also seems to be ineffective right now. Therefore, this has forced the Bitcoin pricealong with the entire crypto space, to operate within narrow bands with reduced volatility.
As mentioned in the chart above, the short-term BTC price has been trading within very tight ranges. Bollinger bands have been very compressed and have been in a parallel trend for more than a few days. Therefore, considering the volume, a notable price drop seems evident as the bears have currently dominated the rally.
Meanwhile, the dominance of Bitcoin and the popular stablecoin, USDT, is also rising remarkably. However, BTC dominance has some prerequisites for continued growth, such as a rise above 44% that can only trigger a rise towards the next levels above 46%. If not, a substantial drop towards 42% could be imminent.
Furthermore, USDT dominance shows the chances of a bullish breakout and a rise of more than 15% to 20% by the end of Q1 2023.
In the worst case, if the prices of popular cryptocurrencies continue to decline and USDT dominance remains high, then a massive flow of Bitcoin and other altcoins into stablecoins is quite possible in the coming days. In such a case, the BTC price may even drop by up to 25% to 50% at the end of March.
Collectively, market sentiment for Bitcoin and other altcoins is bearish, but future predictions remain bullish. Therefore, currently, when the markets are consolidated, a significant price drop can be expected that could attract new traders before the start of the new uptrend.
