Key Insights
- Bitcoin is currently in a heavy 9% dip over the last 7 days
- The market as a whole has suffered as a result of Bitcoin’s collapse, with the global crypto market capfalling by 2.2% to $1.24 trillion.
- US/UK Regulation and Bitcoin’s impressive price action so far may have created an overly optimistic market mood that caused this dip.
- More than $150 million in long futures contracts have been liquidated over the last three days ($400 million this week).
On April 21, the price of Bitcoin fell below $28,000 as the ongoing decline entered its third day.
Today, however, Bitcoin is down by 2.7% over the last day and according to CoinMarketCap statistics, Bitcoin’s most recent trading price was $27,255 at the time of writing.
The market as a whole has suffered as a result of Bitcoin’s collapse, with the global crypto market cap falling by 2.2% to $1.24 trillion in the same time frame.
Today, however, it seems that BTC has hit a fresh wave of woes as its amount of long liquidations has now hit $150 million in the last three days, according to Coinglass.
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Rough Week For Bitcoin
The current market slump likely started last week, when U.S. Federal Reserve officials hinted that there might be one more quarter-point interest rate increase at the forthcoming May policy rate meeting.
Bitcoin and gold prices have since fallen as a result of the Fed’s action, but the dollar rose on predictions of higher rates.
In fact, US survey data has presented a conflicting image of the US economy’s progress, clouding expectations for the future of the economy and the likelihood of more FED tightening.
Because of this and significantly higher-than-expected UK inflation figures, US rates have increased this week, which is normally bad for non-yielding crypto assets like BTC.
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The regulatory environment in the US is still unpredictable, according to some experts, and the outlook is not made any more solid by SEC Chair Gary Gensler’s testimony before Congress earlier this week.
Due to Bitcoin’s impressive price action this year, an overly optimistic market mood may have been another reason for this week’s drop.
According to Sanitment, this bullishness made investors too optimistic, causing more long trades than usual and resulting in millions in long trade liquidations.
Before Bitcoin’s initial decline from the $31,000 mark on April 14, Bitcoin’s Fear and Greed index also had a skewed positive value of 69, indicating greed among investors.
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Meanwhile, Coinglass has some interesting data.
$150 Million Worth Of Long Trades Liquidated In Three Days
Bitcoin bulls have been getting severely REKT (wrecked) over the last three days, as you will soon see.
According to statistics from CoinGlass, more than $150 million in long futures contracts have been liquidated over the last three days, with over 80% being BTC long trades.
With Wednesday’s hundreds of millions included, this week’s total liquidations have reached a whopping $400 million.
In fact, the 10% decline in Bitcoin over the last three days from $31,000 to where it now sits around $27,200s has proven to be one of the year’s most active times for liquidating long positions.
As BTC’s price fell below critical resistance in the $29,000 range earlier this week, selling pressure went the other way and shot right up.
Bitcoin Price Analysis
This week’s massive wave of bearishness was foreshadowed by the RSI entering the overbought zone.
After the decline from $31,000, BTC is now in a freefall and has broken below $28,000 in what appears to be a retest of its 50-day moving average (purple).
The 50-day moving average is currently holding the price of the cryptocurrency up around the $27,200 zone.
However, several analysts have suggested that a break below the cryptocurrency’s 50-day moving average and a subsequent decline to $25,000 may be possible.
Bitcoin testing our key local demand at 28k and not getting the best reaction. If this level is lost, 25-26k is likely tested but this is no cause for concern.
Discussed this in the 60 second clip below, full vid in pinned tweet for more context. $BTChttps://t.co/jYb6tCGI89
— CrediBULL Crypto (@CredibleCrypto) April 20, 2023
Bitcoin’s Price Outlook
Other analysts have pointed out that in the event of a decline to the $25,000 zone, the overall bullish trend on BTC will remain largely unaffected, and may even prove to be an important entry point.
Approaching a high volume node + the EQ of his range. I am looking to play a long scalp here once I see the bulls stepping in
Another play if the bears take over, is to short a loss of the range down to the range low at $26,600 pic.twitter.com/oblzs77BXC
— Crypto Tony (@CryptoTony__) April 21, 2023
However, in the event of a break below $25,000, BTC may enter an even steeper correction and fall straight down to levels as low as $19,600.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
