Coinglass tracker data reveals that trading positions amounting to nearly $250 million, primarily from traders who anticipated a price rise, have been liquidated in the past four hours.
Despite last week’s positive start, which took BTC north to a three-week high of $28,500, the seven-day period did not end so well for the asset. It fell to a weekly low of $26,500 (on Bistamp) on Friday but managed to recoup some of the losses over the weekend.
Due to recent market conditions, however, the BTC price has taken a sharp bearish turn, hitting the bottom at a staggering $25,500.
The trigger for this massive decline was the recent lawsuit that Binance, one of the largest cryptocurrency exchanges in the world, faced against the US Securities and Exchange Commission (SEC). This caused investors to sell their positions due to panic, leading to a downturn in the crypto market today.
Bitcoin Has Not Yet Reached Its Bottom Level
Just as market experts were predicting a potential rise in the Bitcoin (BTC) price, the cryptocurrency market experienced a downturn, following SEC charges against the Binance exchange. This development has led some analysts to speculate that the price of Bitcoin has not yet reached its lowest point.
Recent data indicate a substantial decline in exchange entries for major cryptocurrencies. The exchange input refers to the amount of coins deposited in the exchange wallets.
On-chain analytics firm Glassnode has highlighted this trend for cryptocurrencies such as Bitcoin, Ethereum, BUSD, USDT, USDC, and DAI. The data reveals that foreign exchange inflows for these major assets have been remarkably low, standing at around $1.84 billion. This figure is about $10.36 billion less than the peak inflow seen during the May 2021 sell-off. Said reduction means a decline of about 85% from the peak nearly two years ago.
Market analysts believe that this trend is mainly due to recent capitulation and liquidity outflow events. It is important to note that large entries generally indicate bearish sentiment while declining values suggest the opposite.
What to Expect from the BTC Price Next?
On the daily chart, the price of Bitcoin (BTCUSD) has fallen below the crucial threshold of $27,000, indicating a bearish trend.
Traders should now turn their attention to the immediate support level at $25.5K and the RSI level to determine the next move. After forming a low of $25,566, the BTC price witnessed a deceleration slowdown, suggesting that bulls emerged to defend the support level and hold the price for a bullish reversal.
Currently, there is a strong battle to push the price of BTC below $25K, as market conditions head towards bearish sentiment following the SEC lawsuit.
If Bitcoin continues to witness further downward pressure near the $25,544 level, the asset may plunge again, following a sell-off by short-term investors. On the bearish side, the next support for the BTC price will be at $24K.
However, on the bullish side, there is a chance of a bounce if the BTC price reverses its current trend and rises above the 38.6% Fibonacci level. A rally toward $26,918 will send the price above $27,409.
By Audy Castaneda
