Bitcoin tumbled for a fifth-straight day, putting the largest cryptocurrency on track for its worst month in more than three years and leading a full-flown retreat from digital-asset markets.
At press time, Bitcoin (BTC) was changing hands at around $37,000, after dropping to $30,000 on Wednesday. The price was down 13.76 percent in 24 hours.
Bitcoin price has dropped almost 50 percent from its ATH of $64,863
The latest crash shook out bullish leverage from cryptocurrency derivatives markets, leading to more than $8 billion in position liquidations due to margin calls.
While bitcoin has shed over 30% in the last 7 days, other top 10 coins such as ether (ETH, -34.85%), internet computer token (ICP -55.28%), Binance token (BNB 41.63%), Cardano (ADA -3.84%), XRP (-14.64%), Dogecoin (Doge -14.98%) have suffered even bigger losses, according to data source Coinmarketcap.
It was reported that the correction could soon run out of steam as technical indicators show oversold conditions. Further, the order book is flashing signs of capitulation, the point at which traders trying to enter long positions begin throwing in the towel.
“We are nearing capitulation to the downside,” crypto research firm Jarvis Labs noted in a post on Medium early Wednesday, while drawing attention to the relatively low concentration of leveraged longs at deeper price levels on Binance, the world’s largest crypto exchange by trading volume.
Capitulation is widely considered the final stage of the price sell-off.
Analysts, however, stand divided on whether the market has bottomed out. Patrick Heusser, head of trading at Swiss-based Crypto Finance AG, told CoinDesk that the market needed a correction, and prices could consolidate at lows before moving higher.
“Our desk is buying the dip,” Heusser told CoinDesk.
Stack Funds Chief Operating Officer and co-founder Matthew Dibb said the pullback to the 200-day SMA is nothing out of the ordinary and noted that a further decline to $30,000 is possible.
Bitcoin has taken a beating over the past week, falling sharply from over $50,000 to 3.5-month lows under $40,000.
“The BTC enthusiasm has been sucked out last week by the confluence of “Elon’s corporate ESG (environmental, social and governance) stamp of disapproval, the SEC’s (U..S. Securities and Exchange Commission) public un-enthusiasm for any ETF (exchange-traded fund) & the CME backwardation,” QCP Capital noted in its Telegram channel. Backwardation is when the current price of an asset is higher than its futures price.
Musk attempted to calm market nerves late Sunday with a Twitter announcement stating that the company hasn’t sold its bitcoin holdings. So far, however, that has failed to put a floor under the cryptocurrency.
According to Simon Peters, a crypto-asset analyst at multi-asset investment platform eToro, he said, “from a technical point of view, the price is finding some support from the 200-day exponential moving average, plus other momentum indicators such as the RSI, which shows that the price is somewhat oversold.”
“This means there is a possibility of buyers now stepping in to push prices up and, as we have seen before, investors waiting on the sidelines are already using the sell-off we have seen to invest in crypto assets, taking advantage of the volatility,” Peters added.
