From the highs of Thursday evening, the first cryptocurrency is already losing more than 13%.
The total capitalization of the crypto market, according to CoinGecko, has dipped by more than 10% over the past day, to $1.88 trillion. According to Coinglass, the volume of liquidations over the past day on the crypto market amounted to $726 million.
“As we feared, the sell-off was triggered by sharply negative sentiment in the US stock markets and intensified due to the breakdown of important support levels. Without a sharp intraday reversal (the chances of it being minimal), we can confidently expect an acceleration in the liquidation of long positions in bitcoin and further drawdown. Before the area of $30,000 - $33,000, there is nowhere to even look for support on the chart, ”the GravityPlus analyst team notes.
Arcane Research previously reported that the correlation between Bitcoin and the S&P 500 has reached its highest level since October 2020.
Capital began to be withdrawn from risky assets due to the increase in the yield of ten-year Treasury bonds. The dollar index hit 95.7 yesterday, its highest since January 11, Coinspot writes.
“Cryptocurrency markets have been at a critical support level for some time now. Weakness in financial markets generally entails getting rid of risky assets. If current sentiment holds, Bitcoin will trade in the middle of the $30,000 to $40,000 range,” Stack Funds notes.
Galaxy Digital founder Mike Novogratz previously argued that Bitcoin's fall would end at around $38,000, casting doubt on the possibility of a fall below the key $40,000 level.
Meanwhile, Bloomberg experts note that bitcoin is close to the completion of the correction, as the relative strength index (RSI) has fallen to a minimum level (less than 40), at which a trend reversal and return to growth usually occurs, writes RBC. . According to the agency, the last time the RSI of the cryptocurrency fell to a minimum was in the summer of 2021, when the value of the asset fell to $28,000.
“The persistence of a negative background in stocks sets up a deeper rollback of the cryptocurrency. Potentially, the crypto market capitalization could halve to $830-900 billion before we see a new wave of long-term buyers. For Bitcoin, this suggests a downside potential to $20,000,” the GravityPlus analyst team warned.