Journalist
Posted:
- Bitcoin’s funding rate has continued to decline.
- BTC has also seen declining fortunes as it dropped the $42,000 price range.
Recently Bitcoin [BTC] fell below the $42,000 price range, and there is a possibility of further decline if the current downtrend continues. The price drop has led to a decline in business sentiment and an increase in long-term liquidations.
Bitcoin price drops from two key positions
Over the past two days, Bitcoin’s price has fallen below two major thresholds. On December 17, the daily timeframe chart revealed a decline below the $42,000 mark.
The chart also indicated a slight decline below $41,000 at the time of writing. This downtrend has characterized the price movement since it crossed $40,000.
Source: TradingView
At the time of writing, the Moving Average Convergence Divergence (MACD) trend has turned negative, indicating a bearish trend.
This observation corresponded with the confirmation of the Relative Strength Index (RSI) line, which was around 50. The position of the RSI indicated a weak bullish trend and a possible shift to a bearish trend in the short term.
Bitcoin long traders continue to take hits
While sentiment remained positive despite the recent price drop, it fell. AMBCrypto discovered that, according to Mint glass’ data, there was a drop in Bitcoin’s funding rate after the price drop.
At the time of writing, the financing rate was approximately 0.010%, compared to 0.014 on December 17. This funding rate suggested that fewer traders were showing optimism about a price increase.
Moreover, as a result of the price drop, more long positions were liquidated than short positions.
According to Coinglass, the long positions saw a liquidation of more than $30 million on December 17, while the short positions saw a liquidation of $5 million.
This trend continued at the time of writing, with the latest data showing continued liquidation of long positions of over $29 million and around $3 million for short positions.
Read Bitcoin’s [BTC] Price forecast 2023-24
Bitcoin inflows dominate the exchange flows
The Bitcoin exchange flowchart reveals increased BTC movements to exchanges lately. This move signaled a possible sell-off that could explain the observed price swings.
At the time of writing, there was evidence of a temporary cessation of this inflow, with a notable increase in outflow. In addition, more than 2,000 BTC have been withdrawn from the exchanges.
Source: CryptoQuant