Cryptocurrencies and Bitcoin are collapsing… what are analysts warning of?

I witnessed Digital Currency Markets Significant disruptions over the past day, which have eased Bitcoin BTC Value By over 8%, reaching the $60,700 level for the first time in weeks. This decline represents an estimated loss of over 17% since the coin reached its all-time high (ATH) of $73,800.

Negative control on the market

This sharp decline led to a bearish (negative) trend that gripped the market, with other cryptocurrencies suffering larger losses. Some of them saw double-digit declines.

As a result of all these fluctuations, open interest in the futures market experienced a violent upheaval as liquidations piled up on various exchanges.

The market witnessed the liquidation of contracts worth a total of $657 million. According to the data, $533 million will go to those betting on the rise of Bitcoin (long positions).

While traders on short-term futures (betting on falling prices) suffered losses of just $123 million, according to... Data CoinGlass.

Bitcoin and Ethereum top the list of currencies with the highest futures liquidations. Their value reached $191 million and $134 million, respectively.

Among alternative digital currencies, Solana (GROUND) and Dogecoin (DOGE) where contracts worth $39 million and $14 million respectively were liquidated. This could partly be linked to the sharp declines seen in both currencies.

Followers monitor the “open Interest” indicator, which measures the total number of Bitcoin-related contracts in the futures market. Usually, currency volatility increases when the value of this indicator increases. Therefore, high price volatility is expected to continue until this indicator declines.

Analysts expect Bitcoin to resume its rise after the halving

This drop comes ahead of the expected Bitcoin halving, scheduled for next April.

Some analysts, such as Charles Edwards, founder of the Capriole Fund, believe that the current fluctuations are normal before the halving process. The period immediately following is the best period for investors in terms of return relative to risk.

Edwards attributes his long-term optimism to the exit of less efficient speculators from the market after the halving, as well as the expected increase in institutional demand for the digital currency.

On the other hand, Cryptoquant founder Ki Young Ju believes that inflows of Bitcoin exchange-traded funds (ETFs) are the main driver of the currency's rise and not the approach of the reduction date. half.

Ju believes that the rise in mining costs after the halving will not affect the profitability of mining operations as long as prices remain above $63,000.

Warnings of a deeper drop before the rise

Warn Other analysts like Rekt Capital warn of the possibility of further decline in Bitcoin before the uptrend resumes. Citing historical precedents, where the currency experienced significant periods of decline before previous halvings.

The current market situation differs from previous halvings in that Bitcoin prices were well below current peak levels and there was no significant institutional support at the time, similar to the emergence of traded funds on the Bitcoin exchange (ETF).

The question remains whether these factors will lead to a different path for the next halving process.

Technical analysis of Bitcoin BTC price

The previous analysis is still valid, since we said that the price of Bitcoin, on the 4-hour chart, greatly respects technical levels. This helps us determine entry and exit areas more precisely.

As we have seen in recent days, BTC Price It was trading in a descending price channel within the Fibonacci lines as daily support and resistance levels.

According to the chart, the strongest support levels lie between $60,500, $62,000 and $63,000. The lower limit of the price channel represents a good level to buy.

And Bitcoin BTC Price It is approaching the highest support level at $60,500 with the 61.8% Fibonacci retracement and uptrend line.