With threats of the U.S. market facing a recession ahead, investors are pulling out of risky assets. Consequently, Bitcoin (BTC) and the rest of the crypto market is facing an intense sell-off. With a 10% drop in BTC today, will Bitcoin retest the $50,000 mark?
Following a massive crash in the US markets on Friday, the global market sentiments are on a downhill slope. With Asian and European markets slipping under major levels and turning bearish overnight, the crypto market liquidations are on the rise.
Today, Bitcoin is under $54K, and Ethereum is below the $2,350 mark, with the downfall in altcoins amplified. Will the sell-off wave continue for a bearish trend this week? Let’s find out.
Post-10% Drop, Bitcoin’s Support Trendline Under Pressure
In the 1D chart, the recent negative cycle in BTC price from the $70K peak attains breakneck speed. The downfall forms multiple bearish candles, leading to a streak of four bearish days, which has resulted in an 18% drop.
Currently, Bitcoin takes support from a declining support trendline, as evidenced by the intraday tail formation. Further, it trades at $52,569 with an intraday drop of 7.73%, forming a massive bearish engulfing candle.
The bearish trend breaks under all the crucial EMAs (50, 100, 200), and a bearish crossover in the 50D and 100D EMAs arises. Further, the daily RSI line nosedives into the oversold zone as the selling pressure grows.
Intense Liquidations Warns Continuation in Market Crash
Crypto Market Liquidations
Per data from Coinglass, the broader market sell-off is rejecting to slow down as the fear grows. In the last 12 hours, almost $700M worth of positions have been liquidated, and $569M worth of bullish positions have gone REKT.
Global Market Crash: United States Starts the Avalanche
The tech-centric US index Nasdaq has crashed almost 10% in the last three weeks, with a 3.4% drop last week. This marks the worst three-week performance since September 2022.
A couple of reasons behind the US market crash are surfacing in hindsight as the bears pick up pace. The main reasons are the lower than anticipated jobs report, increased unemployment and a slowdown in the manufacturing sector.
Further, the U.S. Federal Reserve chose not to cut rates in the recent FOMC meeting and made no promises to cut rates in September. Lower interest rates have a symbiotic relation with Bitcoin’s performance, and the extension in current rates fuels the crypto market crash.
Furthermore, a domino effect is seen all over the globe as the Asian markets are in a freefall. Japan’s Nikkei 225 has dropped as much as 11%, with a 15% drop in the last three weeks.
Further, it is down by almost 30% from its all-time high. Fueling the sell-off in Japanese crypto investors, the Bank of Japan announced an increase in interest rates to the highest in 16 years.
In the Indian Markets, the NIFTY 50, an index of the top 50 stocks, is down by 3% today and almost 4.5% from its all-time high.
Will Bitcoin Drop Under $50K?
As the selling pressure increases, the chances of the support trendline getting compromised are increasing. With the BTC price under $53K, the global market sell-off, the rising liquidations and the rising FUD, Bitcoin is likely to crash under $50K.
However, the bulls can make a comeback as the global market hits a base, and the crypto market could spearhead the recovery rally.
