Credit: Original article published by Crypto Briefing Blog.

Bitcoin’s roller-coaster ride took a downturn Monday as BTC dropped 18% to lows of $46,700 on Coinbase, causing rampant liquidations across derivatives markets.

The Bitcoin Top Debate

An $11,000 massive correction drove Bitcoin below $46,700 on Coinbase.

Between 9 and 10 am this morning, $2.37 billion margin positions got liquidated throughout the crypto markets. The total liquidation in the last 24-hours amount is $4 billion, and the crypto market has recorded over $6.5 billion in liquidations since an all-time high of $57,000 reached on Saturday.

The bottom was different across crypto exchanges. European exchange Bitstamp crashed during the drop, and the last recorded low on the exchange is $47,400.

On Bitmex, the low was $47,500 as well, while Kraken revealed a significant lack of liquidity with a drop to $45,000 BTC. 

BTC/USD hourly chart on Coinbase. Source: Trading View

U.S. Treasury Secretary’s comment acted as the perfect catalyst for the sudden plunge. Yellen deemed Bitcoin inefficient and raised illicit financing concerns yet again. 

On Tuesday, Bitcoin broke above $50,000 for the first time and hit an ATH on Saturday. Ethereum also broke above $2,000 for the first time on Feb. 20. 

A comparatively smaller drop late on Saturday caused $2.5 billion in liquidations. Bitcoin touched lows of $54,000 that day, while ETH to $1810.

Quick recovery to opening prices may indicate that buyers quickly bought the dip, but the price action is also a textbook top indicator. 

Last Chance to Sell Bitcoin? 

The price charts of all cryptocurrencies, especially altcoins, paints a painful picture for traders. The drastic drop hunted crypto long-orders and caused liquidations worth $2.37 billion.

The wick or shadow marks the top and bottom in the stipulated time period, representing the price fluctuations relative to its opening and closing price. 

A longer wick indicates a large fluctuation in the asset price. This morning most cryptocurrencies painted a classic “hanging man.” A hanging man candlestick in an uptrend represents heavy selling, which may mark the asset’s local top. 

The dormancy flow metric, which measures the flow of ‘HODLer’ tokens relative to the on-chain volume, has entered the overbought region as well. In 2019, the dormancy flow marked the top around $14,000, while in 2017, the ratio was over-extended for most of the year.

If the flow continues to increase, with buyers failing to keep up the price, Bitcoin could drop further to retest the previous high of $42,000.

Bitcoin entry adjusted dormancy flow. Source: Glassnode

The struggle between the bulls and bears in the next couple of weeks will be instrumental in setting the mid to long-term price as BTC reaches a crucial point.

Disclosure: The author held Bitcoin at the time of press. 

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CryptosOnline.com does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

#Bitcoin #Crypto #Cryptocurrency

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