Bitcoin (BTC) has recently experienced a severe downturn, reflecting heightened market volatility and a series of adverse economic developments. Currently trading at $51,633.31, Bitcoin has fallen by 13.26% in the past 24 hours, further exacerbating a broader decline that has been unfolding over the last few weeks. The cryptocurrency briefly dipped as low as $49,000 on major exchanges like Binance, marking a substantial retreat from its recent highs of over $70,000 just a week ago.
The recent price drop has been characterized by a significant increase in trading volume, which has surged by 184.51% to reach $77.88 billion. This surge in volume during a price decline is a strong indication of panic selling, where investors liquidate their positions in response to plummeting prices and negative market sentiment. This behavior is underscored by a 13.34% drop in market capitalization, which now stands at $1.04 trillion, reflecting a sharp decline in investor confidence.
Technical Indicators Highlight Bearish Sentiment
Technical analysis of Bitcoin’s price movements highlights a troubling pattern for bullish traders. The formation of three consecutive lower highs (LH) since March signals ongoing bearish momentum. Previous instances of such patterns in April and June led to substantial corrections of 23% and 26%, respectively. The repeated formation of these lower highs could indicate a continuing downtrend, with Bitcoin facing key resistance levels that need to be overcome for any bullish reversal.
Bitcoin’s present resistance area lies between $64,500-63,000 coinciding with the 50-day and 100-day exponential moving averages (EMA). On July25th this level was tested during a correction and could potentially be an important battleground in safeguarding against any extra declines . Nevertheless if the price goes below $63500 it could spark off another wave of sell-offs forcing bitcoin to go down below $50k.
Liquidation Events and Market Skepticism
Recent market activities have been characterized by massive liquidation events, with over $1 billion worth of digital assets being liquidated across various exchanges. This includes Bitcoin traders suffering significant losses, particularly those with leveraged long positions. If Bitcoin fails to maintain its support levels, it could lead to further exits of long positions, exacerbating the downward pressure.
Market scepticism towards the recent price movements of Bitcoin has been shared by notable personalities like Peter Schiff who referred to the current scenario as “crypto Black Monday”. He said that Bitcoin had dropped 20% since last Friday when closed Bitcoin ETFs suggesting that there might be worse times ahead. The fear and greed index for Bitcoin also supports this cautious sentiment as it is currently below 26%, showing extreme investor fear.
Whale Activity And Long-Term Support
While there is lots of immediate bearishness regarding bitcoin there are some positive signs coming from on-chain data particularly whale activity. The number of BTC addresses with large amounts of BTC stayed the same or increased slightly. It could mean that big investors see current lows as a chance to buy and maybe this forms a bottom.
Bitcoin’s long-term support lies between $60k-$56k, backed by over 6 million addresses containing 2.42 million BTC at an average price of $56,083 . This range has historical significance and may provide crucial resistance against further declines. Analysts such as Captain Faibik have stressed defending daily MA128 (currently at 65.2K) as a key level for supporting bullish momentum.
