After liquidity was destroyed following United States equity markets closed on Good Friday to commemorate Easter, Bitcoin continued to lead other cryptocurrencies in a sell-off on Monday.
Bitcoin is currently trading at $39,075 after breaking the $40,000 threshold just before Sunday’s closure. This downturn has been reflected across the board, with Ethereum trading at $2,917 after breaching trendline support at $3,026. According to Coinglass, the entire crypto market has seen $237 million in liquidations in the last 24 hours, with 79,448 dealers caught up in the quagmire.
Monday’s decline adds to a month-long slide that has erased almost all of March’s gains. The overall Market Cap of the cryptocurrency market has plummeted 17.45 percent in the last six weeks, from $2.16 trillion to $1.812 trillion.
The onslaught has been attributed to a number of macroeconomic developments, notably the Fed’s aggressive stance, which has caused market investors to panic. Others see the crypto market as a reflection of major stock indices’ continued decline.
Despite the fact that Luna Foundation Guard (LFG) and MicroStrategy made significant BTC purchases in the last two weeks.
Some people are still puzzled as to why Bitcoin is losing value
Fundamentally, BTC whales appear to be accumulating, with large amounts of the cryptocurrency being taken off of exchanges last week, and smaller addresses significantly increasing their positions throughout the decline.
Liquidity has been a crucial concern for making real-time investor decisions, according to Deribit Insights, the research business of crypto exchange Deribit. While the firm highlighted the large BTC buying near $40,000, it warns that due to this weekend’s illiquidity, we may see short-term price capitulation.
A famous Bitcoin chartist, Kevin Svenson, is also predicting a short-term selloff. He said in a tweet on Saturday that the current Bitcoin mindset mirrored a $6k drop. Although Bitcoin remains bullish, he believes a break below the previous lower high is still imminent, despite the fact that price has managed to produce high lows in the weekly timeframe.
“Likely what would happen is that we will just get one final capitulation zone before recovering long term,” he wrote on Saturday before adding, “What this post actually means is, I’m preparing to Buy the Blood.” Today, he believes more factors are at play.
Cameron Fous, founder and head trader at Krypton, a crypto-analysis platform says that Bitcoin could drop further, hitting $36,000 if a classic range that he shares is anything to go by.
He too believes Bitcoin’s pullback is strongly tied to the US30 index movements which for now, is signaling a further descent.
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