Bitcoin declines in lockstep with American stocks as the dollar gathers steam in an attempt to retake earlier twenty-year highs.
Bitcoin’s price plunged below the pinnacle of the 2017 bull market, dropping below the $20,000 mark as the leading currency swings in lockstep with the American stock market.
While BTC/USD lost 2.5% during the course of a single hourly candle, the S&P 500 and Nasdaq Composite Index lost 1.1% and 1.25%, respectively, in the first hour.
The most popular cryptocurrency is expected to have a deeper drop, thus the most recent swings did not come as a surprise to traders. Many had previously predicted a regression to the macro lows observed in June.
Renowned cryptocurrency expert on Twitter, Capo of Crypto stuck by a prognosis for $16,000 as the target price should major support fail to materialize at $19,000.
He then stated that the possibility of a brand-new relief bounce had been made possible by fading ask positions on derivatives markets.
“Feels like Bitcoin has a date with the red range below, between $17.8k–$18.9k. Is it guaranteed? Absolutely not, but it’s certainly something I’ll be watching for,” Caleb Franzen, senior market analyst at Cubic Analytics, stated the day prior alongside various charts.
“Quite simply, each breakdown has resulted in price retesting the low of the prior selloff. These “capitulation wicks” became the nice price target once the support trendline failed, eventually leading to a new “capitulation wick.” Bulls want this pattern to end.”
Traders’ failure to profit from their bets on the price trajectory of Bitcoin and other cryptocurrencies has led to a sizable amount of liquidation as a result of the choppy market price action. Data from Coinglass shows that 53.36% of all liquidations are short order liquidations.
60,296 traders from across the cryptosphere liquidated their long orders, bringing the total amount liquidated to about $239 million in the past day.
There are signs that the volatility will increase. The lack of a BTC futures premium, a string of liquidations over the previous week, and excessive stablecoin lending all point toward potential new yearly lows, so take caution with your holdings.