The market is experiencing a bloodbath in the indices as $353 million worth of cryptocurrencies was liquated today. In the last 24-hours, an astonishing total of 183,239 investors liquidated their holdings. Therefore Bitcoin plunged to near $38,500 and reached its lowest levels since August 2021. In addition, Bitcoin’s slump dragged the entire crypto market down while some tokens dipped drastically to double digits.
Bitcoin’s dramatic fall also comes at a time when inflation climbed 7% in the U.S, the highest ever since 1982. The slump also comes at a time when Russia’s Central Bank called for a complete ban on cryptocurrencies.
The latest report by Bloomberg suggests that Bitcoin might be nearing a bottom and the worst is yet to come. As per Bloomberg’s analysis, Bitcoin’s relative strength indicator (RSI) has now entered the magical 30-40 zone. Previously, when Bitcoin reached the 40 RSI levels, it was heavily oversold and in return saw its price suppress further.
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Bloomberg also tweeted the report with the caption, “This price chart suggests Bitcoin may be nearing a bottom.” The report suggests that if BTC slips below the 30 RSI mark, it could spell furthermore trouble. Nonetheless, if BTC manages to claw back and find resistance between 50-60 RSI, then the market might see a recovery.
Surprisingly, Mike Novogratz, Bitcoin tycoon and the CEO of Galaxy Digital had issued a bearish warning on Bitcoin this week. “Tens, bonds breaking down. As long as rates go higher we will see pressure on Nasdaq and crypto. 2% seems a logical target for tens,” he had tweeted.
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Novogratz says that 2% seems like a logical target for him, which means there could be more downside for cryptos. At that time of his tweet, BTC was already pointing towards a downward trend and began displaying bearish sentiments.
So what’s next for Bitcoin?
Bitcoin hit an all-time high of $69,000 in November 2021 and is now down -44% from its ATH. BTC had a wild run in 2021 swinging both to the top and down. Its low came when Elon Musk tweeted in May 2021 that Tesla will no longer accept Bitcoin as payment due to environmental concerns. The market dipped to new lows and spiraled upwards after Musk announced Tesla will accept BTC, two months later.
Coming back to 2022, the year started off on a bearish note as Bitcoin mostly traded in the red. When BTC showed strength, it mostly traded sideways and no major profits and spike in price was reported. The situation is now grim and the global financial market is in a tumulus condition. Immediate recovery might not be in sight and the downward trend might continue creating a flamingo effect of panic selling.
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At the time of publishing, Bitcoin was trading at $39,219.90 and is down -6.5% in the 24-hours day trade.