BTC price stands at $64,000 as this article is prepared, with altcoins steeped in red. The general cryptocurrency market has experienced losses exceeding 10%. What caused the rapid fall in Bitcoin prices and the extreme sell-offs in altcoins? What are the predictions for the coming days?
Why Did Bitcoin Fall?
Cryptocurrencies‘ total market value fell by 8.7% to $2.17 trillion. Bitcoin dropped to as low as $60,660 in the last 24 hours. The second-largest cryptocurrency, Ethereum (ETH), fell by 10.6% during the same period, trading around $2,900. For now, there is a slight recovery in cryptocurrencies.
The relaxation that started on April 12 laid the foundation for the correction experienced in the last 24 hours. The attack on Iran’s embassy in Syria by Israel escalated tensions in the region. Iran, which has been issuing threats over the past few days, sent rockets and drones to attack Israel late last night. Investors, thinking that an actual war has started, accelerated their sell-offs, fearing a drop similar to the one during the Russia-Ukraine incident.
The US dollar has gained 0.79% in value since April 12. Investors moving away from risky assets have increased the dollar’s strength while also causing Bitcoin and other risky assets to lose value.
Cryptocurrency Market Commentary
Since April 12, positions worth $2.5 billion have been liquidated. The demand in the cryptocurrency markets was strong due to Bitcoin ETF entries and optimism themed around Bitcoin Halving 2024. Even professional traders using 3-4x leverage suffered devastating blows to their capital in the recent process.
So what’s the situation on the technical front? If Israel does not respond to the last “harmless” attacks and prolong the process, a reduction in tension is expected. This would also be positive for crypto. Since March 13, the market has not been able to surpass the upper trend line of the bull flag. Today’s drop in the crypto market also seems to be connected to the bull flag formation.
Now the lower trend line is being tested, and if the region is not lost, we should see a recovery back towards the resistance area. If the expected scenario occurs, the market could see a 40% increase, and the total value could jump to $3.1 trillion.
