The News Crypto -
- Bitcoin hits six-month low; faces potential drop below $40K.
- The market cap falls 14%, with $1 billion in liquidations.
In a dramatic turn, the cryptocurrency market has experienced a major setback, with the total market capitalization plunging by 14% in the past 24 hours. This drop saw assets worth $1 billion liquidated from the crypto market, marking one of the steepest declines in recent history. Bitcoin, the leading cryptocurrency, has been particularly hard hit, falling 13% to a six-month low of $49,121, which has unsettled the crypto community. Despite this, Bitcoin’s trading volume surged by 186% during the same period.
Currently, Bitcoin faces intense selling pressure, with its daily Relative Strength Index (RSI) at a low 24. Analysts suggest that this technical breach could signal a potential decline to $40,000. Traders are also experiencing their most negative unrealized profit margins since November 2022.
Additionally, the annualized three-month futures premium on Binance, a major crypto exchange, has dropped to 3.32%, the lowest since April 2023. Similar declines are observed on OKX and Deribit, indicating a widespread trend across major exchanges.
The reasons behind this market downturn are not entirely clear. Analysts speculate that the Bank of Japan’s recent interest rate hike may have ended yen arbitrage, prompting traders to sell off risky assets to repay debts. Geopolitical tensions, including instability in the Middle East and US political uncertainties, along with a rise in crypto-related hacks, may also be contributing factors.
Can Bitcoin Recover?
Bitcoin’s recovery is slow, currently trading at $50,778. With over $10.68 billion liquidated from centralized exchanges in the last 24 hours, the market remains volatile. The daily chart shows Bitcoin entrenched in a bearish trend, with the 9-day Exponential Moving Average at $60,756.
If bullish momentum returns, the next resistance levels are $62,567 and $65,374. However, continued bearish sentiment could lead to a drop to $54,673, with potential support at $48,358.
This content was originally published on The News Crypto
