Bitcoin (BTC), as well as many stock markets, saw a brief rebound after the Federal Open Market Committee (FOMC) meeting on Wednesday. However, we warned that it may not be the end of the current downtrend due to high fears in financial markets. However, the revival was even shorter than expected.

Bitcoin price drops by 9%

The bitcoin price touched almost $40,000 on Wednesday evening after the FOMC meeting. Bitcoin then declined steadily from $39,850 to $39,500 by late yesterday afternoon. Then bitcoin started to plummet towards $36,000 with a dip to $35,800.

Overnight bitcoin held up around $36,500, but at the time of writing, bitcoin is falling back to a price of $36,000 on KuCoin and $34,050 on Bitvavo. This means that BTC is currently no less than 9% in the minus.

Huge bitcoin long squeeze

Bitcoin’s price decline was accompanied by a huge so-called long squeeze† According to data from coin glass More than $200 million worth of futures contracts were liquidated in the past 24 hours, mostly lung positions. For all cryptocurrencies, that was even $400 million. The decline was also accompanied by a redistribution of BTC among long-term holders and whales.

Bitcoin correlation with stocks

In addition, the decline in bitcoin price also coincided with red-colored stock markets such as the Nasdaq and S&P 500. Asian stock markets also open in the red today. The riskier stocks of technology companies, with which bitcoin currently still has a high correlation, are particularly hard hit. The decline also again coincided with a rising US dollar index (DXY) rate, although it is falling sharply at the time of writing.

Will the bitcoin price break out of the trend channel?

Bitcoin has been in a downtrend since late March, but may still have been in an uptrend since the low from the end of January. However, the price has now also broken out of this trend channel and that may not be a good sign. Bitcoin may still be in an uptrend since the low from last summer, when the price plunged below $30,000. In the meantime, we have to take into account that the price may again test these lows.

More volatility is expected

Still, some analysts, such as veteran Peter Brandt, are reporting that the financial markets may reverse trend and that could give bitcoin some leeway as well.

Meanwhile, we see a significant influx of stablecoins to exchanges. We expect to see more volatility with prices in the near future.

Crypto Insiders Premium for bitcoin analytics

Do you want to learn more about trading, analyzing and using cryptocurrencies? Join Crypto Insiders Premium and come and have a look for free for the first 30 days. Ask analysts questions, chat with our avid community and receive technical and fundamental analysis daily!

LEAVE A REPLY

Please enter your comment!
Please enter your name here