It’s another very red day in the cryptocurrency market and bitcoin (BTC) continues to fall. The price was already in a downward trend due to the high fears in traditional financial markets, but the terra (LUNA) incident is causing even more serious blows.

Bitcoin price drops 10%

The bitcoin price came close to $40,000 a week ago, shortly after the FOMC meeting. By yesterday morning, bitcoin had plummeted all the way to $30,000, but initially appeared to be holding out. Bitcoin then recovered towards $32,000, but failed to break through yesterday afternoon.

Then the US Consumer Price Index (CPI) figures were released. We warned early this week that its publication could potentially cause even more volatility. Bitcoin then plunged below $30,000 for the first time since last summer.

Yet bitcoin immediately made a small bounce and recovered slightly, but the price did not go beyond $31,650 and started to fall again. By midnight, bitcoin briefly found support around USD 29,000 and recovered slightly, but that too was short-lived.

Bitcoin then plunged even deeper, falling even below $27,000 to a low of $26,600 this morning. That is the lowest BTC price since the end of 2020. At the time of writing, Bitcoin is bouncing back towards $28,000 on KuCoin and $26,550 on Bitvavo. Bitcoin is therefore still 10% in the minus today and 30% in the minus compared to a week ago.

BTC Panic, Liquidation, Capitulation & Decoupling

That means that only investors who bought their BTC more than two years ago are still in profit:

The enormous panic in the crypto market is causing a significant capitulation among investors, especially among the short-term holders:

The price decline is also accompanied by a huge liquidation of no less than $ 1.2 billion:

Due to the LUNA/UST fiasco, bitcoin is currently falling even faster than stock markets like the Nasdaq. However, this isn’t the long-awaited disconnect we were hoping for, of course:

In fact, the incident is currently making other stablecoins look unstable as well. Tether plunged all the way to $0.95 this morning, but the usd coin (USDC) rose to $1.04.

The USD 27,000 has been seen as a possible low on this downtrend. Outside of the dip to $26,600, this limit is still holding up so far. Whether bitcoin can make a trend reversal now, however, is highly uncertain. Fears and panics remain high and we may need to anticipate a further decline towards the next barrier, around USD 24,000. There are also analysts who now even fear a dip to $20,000.

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