Bitcoin has plunged more than 13% in just four days, dropping from $79,300 to now trade at approximately $63,844. This decline has brought it below the key psychological level of $69,000, which previously marked the peak of the 2021 bull market and is viewed by many as a crucial support threshold.
The fall has been accompanied by a notable decrease in futures trading, with BTC’s open interest diminishing by over $10 billion within the last week.
Key Takeaways:
- Bitcoin’s drop reflects a 13% decrease in four days, marking a significant leverage reset.
- A vital Bitcoin demand zone exists between $58,000 and $69,000, bolstered by high transaction volumes and the 200-week moving average.
- Current indicators suggest potential peak selling pressure for BTC, although a rebound may not take place soon.
Importance of the $69,000 Level
This level is significant as it represents the apex of the 2021 bull market. Historically, previous peak prices have provided support levels during periods of decline. During the last cycle, Bitcoin bottomed around the 2017 high of $19,600 before temporarily dropping to around $16,000 in November 2022.
Market analysis from Bitwise’s André Dragosch has indicated that a majority of recent transactions have taken place within the $58,000 to $69,000 range, aligning with the 200-week moving average that sits near $58,000, reinforcing it as a significant demand zone.
Record Oversold Signals for BTC
Market analyst Subu Trade reported that Bitcoin’s weekly relative strength index (RSI) has dipped below 30, a level it has reached only four times previously; each instance witnessed an average rally of 16% within the subsequent four days.
It has also been highlighted that Bitcoin’s adjusted net unrealized profit/loss (aNUPL) has turned negative, implying that the average holder is now at a loss. Similar occurrences in the past have resulted in price recoveries for Bitcoin.
As analysts evaluate the current market sentiment, they note that the speed of deterioration is notably quicker than in previous cycles, suggesting a condensed phase of capitulation may be near.
This article does not provide investment advice. Trading in cryptocurrencies involves risk, and it’s advised that individuals conduct their own research before making investment decisions.
