Bitcoin (BTC) is experiencing heightened volatility as it dipped below the $39,000 threshold on Tuesday, marking a 4.33% decline over the last 24 hours. The cryptocurrency with the largest market capitalization is currently trading at $38,955 at the time of this report.
According to data from Coinglass, a total of 124,153 traders faced liquidation in the past day, resulting in a cumulative liquidation value of $326.47 million. Notably, the most significant single liquidation order occurred on Bybit, amounting to $5.00 million, as indicated by the data.
In the weekly charts, the price of Bitcoin has slipped by just over 9%, and over the course of the past month, it has seen a decline of 10.72%, according to data from CoinMarketCap. This decline comes after a sudden surge that propelled Bitcoin to a two-year high of over $49,000, coinciding with the launch of 11 Bitcoin exchange-traded funds (ETFs) on January 11, following approval by the SEC.
Bitcoin has faced increased pressure since Monday, following a series of sell-offs over the previous weekend. This decline aligns with earlier predictions made by Chris J Terry, the founding partner of BTC Data Corporation, who had expressed concerns about the impact of GBTC’s significant sell-off on the cryptocurrency’s price.
With the price of BTC currently below $39,000, it appears less likely for the cryptocurrency to quickly reverse this bearish trend. However, experts are optimistic that this trajectory may change, particularly with Bitcoin’s next halving cycle approaching in April.
Meanwhile, Ethereum has also witnessed a downward trend, experiencing a 6% decline to reach $2,230. This drop could be attributed to substantial selling pressure from Ethereum’s Foundation. Additionally, Ethereum has seen significant outflows, totaling $13.6 million.
Other cryptocurrencies and stablecoins have also experienced losses, with Solana (SOL) down 8%, Avalanche (AVAX) nearly 10%, and DAI and TRON both falling by less than 1% in the past 24 hours.
Bearish Sentiment Likely
Cryptocurrency analysts have expressed concerns about the potential for further price declines as the prominent cryptocurrency market experiences turbulence.
One analyst from Bitfinex shared with Cryptonews that a significant price correction, potentially even lower than the current levels, would not be unexpected given the prevailing bearish sentiment. They identified crucial support levels for Bitcoin (BTC) between $38,000 (close to the short-term holder realized price of BTC at $38,307) and $36,000.
The analyst also noted that many investors who had acquired BTC less than a month ago are now exiting the market at a loss. This decrease in average profits for short-term holders, who tend to react more sensitively to short-term market fluctuations, could lead to selling pressure or increased exit liquidity, according to the analyst.
Another crypto analyst based in Belgium, known as Nestay, posted on social media platform X (formerly Twitter), suggesting that the current drop in cryptocurrency prices may not have reached its conclusion yet, indicating a potentially prolonged period of decline.
