Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Bitcoin’s 13% price drop in the past day led to a dip in the overall crypto market cap.
- Longs went down in a big way, with $373.37 million in positions liquidated.
The events of the past 24 hours shook the crypto market, with Bitcoin [BTC] experienced a 13% dip last day. This caused the king coin to briefly hit the $25k price zone before recovering to trade at $26.5k, as of going to press.
Read Bitcoin [BTC] Price Forecast 2023-24
According to CoinMarketCap, the global crypto market lost more than 6% of its market cap within the period. BTC’s market dominance also fell to 48.45%, representing a drop of 0.56% over the day.
With much speculation in the markets about BTC’s sudden price drop, investors and traders alike remained cautious as events unfolded.
Is the market dump coming?
Source: BTC/USDT on Trade View (4H)
BTC’s price chart over the four time frame showed significant consolidation around the $29.4k price zone. This was after the price rejection at the bearish order block (OB) between $29.8K and $30.3K.
With Bitcoin’s market structure turning bearish on the daily time frame in late July, short-term sellers have been preparing for a sustained downtrend.
Amid rising volatility, the Relative Strength Index (RSI) sank deep into the oversold zone, reaching 5.31 in the space of four hours. Similarly, there was a notable outflow of capital, causing the Chaikin Money Flow (CMF) to fall to -0.27, although it softened slightly to -0.18 at the time of writing.
Traders’ cautious approach could limit a price recovery for BTC as sellers continue to dominate the market. With a Fair Value Gap (FVG) between $25.1k and $26.5k, sellers could push for a retest of the $25.3k price zone before bulls can initiate a sustained rebound.
Longs broke en masse in the futures market
Source: Coinglass
The sharp drop in prices wiped out millions of long positions on several exchanges. Dates from Mint glass showed that $373.37 million worth of long positions were liquidated in the past 24 hours. This amounted to 74.8% of total $499 million liquidations within the period.
How much are 1,10,100 BTC worth today?
Similarly, during the same period, there was a spike in exchange inflows, per Sanitation. This highlighted the massive selling pressure that contributed to the price capitulation.
While the press price levels could be considered a decent buying opportunity, the bearish price action was something to watch with many active sellers still in the market.
Source: Sentiment