Bitcoin price is finding soft support at $35,000 after dropping 7.4% in the later hours of Jan. 19.

According to Cointelegraph contributor Joseph Young, the correction was primarily the result of an overheated derivatives market and uncertainty over whether BTC can recapture the $40,000 level. Data from Cointelegraph Markets and TradingView shows that the price of Bitcoin (BTC) fell as low as $33,400 before recovering to the $35,000 level. 

Not all is lost for the top cryptocurrency though, as news BlackRock, a multi-trillion-dollar asset manager, had submitted filings to the U.S. Securities Exchange Commission that mention the possibility of using Bitcoin derivatives and other assets as part of its investment scheme.

<figure><figcaption style="text-align: center;">BTC/USDT 4-hour chart. Source: TradingView</figcaption></figure>

According to Decentrader analyst filbfilb, Bitcoin could be “trapped in consolidation between $30,000 and $38,000,” with a lot of buy orders currently “stacked between $30,000 and $33,000.”

According to filbfilb’s analysis:

“Demand in the low $30s was tested today and has since bounced with Coinbase leading the price on the drop. The market is fearful in the demand zone as shown by funding.”

The analyst went on to say that a further drop is not expected and a longer consolidation is more likely. Filbfilb also noted that new Tether (USDT) output had recently been on hold but new money was released on Jan. 20 following a request from iFinex Inc for a 30-day extension to produce trial documents for the New York Attorney General.

<figure><figcaption style="text-align: center;">Daily cryptocurrency market performance. Source: Coin360</figcaption></figure>

Traditional markets respond to President Biden’s inauguration

The traditional markets saw a surge in optimism on Jan. 20 as the U.S. swore in Joseph R. Biden as the 46th President.

The S&P 500, NASDAQ and Dow all finished the trading day off in the green, up 1.39%, 2.31% and 0.83% respectively. The S&P 500 and NASDAQ also reached new all-time highs during the course of the trading day.

<figure><figcaption style="text-align: center;">BTC/USD daily chart. Source: Coin360</figcaption></figure>

While the majority of cryptocurrencies are posting losses, Polkadot (DOT) resumed its uptrend by rallying 5.04%. The only other top 30 cryptocurrency that posted notable gains is VeChain (VET), which is up 11.47%.

Hedera Hashgraph (HBAR) has also displayied a stand-out performance, surging 44% overnight and currently trading around $0.0984. REN also broke out today, gaining 15.94% in the past 24-hours.

The overall cryptocurrency market cap now stands at $995.5 billion and Bitcoin’s dominance rate is 64.8%.

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