Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
A “key level” comes into play as Bitcoin challenges longer-term support lines and deals a major blow to long positions.
Bitcoin (BTC) fell by $8,000 in hours on Wednesday as hodlers saw a return of levels not seen since the start of February.
BTC/USD 1-minute candle chart (Bitstamp). Source: TradingView
Bitcoin comes for leveraged traders... again
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD stumbling to new lows of $32,200 on Wednesday.
Selling pressure, already high, kept coming as claims of a fresh Chinese crackdown combined with a stocks rout and a strengthening United States dollar.
In what is being called by some a “capitulation bottom,” Bitcoin failed to hold $40,000 support and began abrief freefall below its significant 200-day moving average.
While the dip in dollar terms was average by Bitcoin’s standards, it caused mayhem among speculative traders, with a single hour seeing $2.7 billion of liquidations. Total 24-hour liquidations stood at $6.5 billion.
“Long leveraged traders liquidation spike on that move down in the past hour,” Philip Swift, founder of analytics resource LookIntoBitcoin, tweeted alongside a chart.
Bitcoin liquidations chart. Source: Philip Swift/Twitter
Rafael Schultze-Kraft, co-founder of fellow analysis resource Glassnode, added that short-term BTC investors were now at a loss and that current prices represented a line in the sand.
He referenced Glassnode’s Short Term Holder MVRV indicator, which looks at the price of unspent transaction outputs 155 days old or less.
“Short-term holders now under water, as STH-MVRV drops below the neutral line. Key level,” he commented.
Bitcoin Short Term Holder MVRV chart. Source: Rafael Schultze-Kraft/Twitter
Altcoins fall in line
At the time of writing, Bitcoin was attempting to cement a floor above $37,000 amid uncertain conditions.
On altcoins, the picture was similarly grim, with many major-cap tokens shedding nearly 30% on the day.
Among the biggest drops were Telcoin (TEL) and Shiba Inu (SHIB), both of which had previously booked significant gains.
Ether (ETH), meanwhile, briefly lost sight of $2,000 before recovering.
A silver lining for Bitcoin bulls was its market capitalizatio dominance, which rose from below 40% to nearly 45%.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.