- Why is Bitcoin Price Falling?
- Technical Analysis and Key Levels
- BTC's Open Interest and Trading Activity
Bitcoin (BTC) has experienced a free fall to $59,000 from $61,000 after gaining 4% during Asian trading hours. However, the massive drop occurred in the past hours, resulting in $9.92 million worth of long positions being liquidated, according to on-chain analytical firm CoinGlass.
Why is Bitcoin Price Falling?
In the current market conditions, short sellers are highly dominating and creating significant selling pressure. The potential reason behind this ongoing sell-off is the lack of interest from exchange-traded funds (ETFs) traders and CryptoQuant's negative funding rates. According to CoinGlass data, this is the second consecutive day that the US spot Bitcoin ETF has registered a negative flow of 1.77K BTC. Meanwhile, BTC's funding rate currently stands at around -0.002. This on-chain data indicates bearish sentiment, with short sellers dominating the market. If these sentiments continue and the BTC price falls to the $58,500 level, approximately $421 million worth of long positions could be liquidated.
Technical Analysis and Key Levels
BTC's daily chart looks extremely bearish, and it is trading below the 200 Exponential Moving Average (EMA) on a daily time frame, indicating it is in a downtrend. With the current price rejection from the 200 EMA, there is a high possibility BTC could fall to the $58,000 level, a crucial support level. Since August 7, 2024, Bitcoin has consistently taken support at this crucial level. If BTC holds this level, there is a high possibility of price reversal. However, if it fails to maintain above $58,000 and closes a daily candle below $57,000, it could fall to $54,000 in the coming days.
BTC's Open Interest and Trading Activity
With a significant price drop of over 3.5% in the last three hours, BTC's open interest has declined by 3.1%, according to CoinGlass data. At press time, BTC is experiencing massive selling pressure and is currently trading near the $59,085 level and has seen a price drop of 0.5% in the last 24 hours. Meanwhile, its trading volume has dropped by over 30% during the same period, indicating lower participation and increased fear among traders.
The sharp drop in Bitcoin price is causing significant concern among investors and traders. Current market conditions and analytical data indicate bearish sentiment dominance. Further market movements will depend on changes in funding rates and potential recovery of interest from ETF traders.
Comments