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Bitcoin lost approximately 8% of its value overnight, and the losses of altcoins have already reached double digits. As risk appetite significantly weakened, we witnessed a series of bad news. This situation led to excessive sales. Investors who did not target below $26,000 for BTC lost hundreds of millions of dollars in futures trading in the last 24 hours.
Historical Comparison of Bitcoin
Total liquidations challenged what was seen immediately after the collapse of the FTX exchange, which caused BTC/USD to drop to $15,600, the lowest level in two years in November 2022. Competing with the major crash that devastated cryptocurrencies, the recent drop was not a common occurrence. In fact, we have been saying that BTC’s volatility has reached a level that has been seen three times in the last seven years. The reversal of historical volatility bottom caused investors to experience losses similar to those in November.
The decline in Bitcoin price started with Binance CEO targeting USDT. With the bad macro data and finally the FOMC minutes, risk appetite was severely undermined. Then, we experienced what we have been experiencing for the past 24 hours. With the decision of sanctions by the Fed, the bankruptcy of SpaceX and Evergrande, investors have moved towards the direction they did not want to go, missing the high volatility days they had longed for.
Is it the Right Time to Buy Cryptocurrencies?
No one can tell you this, and no matter who it is, the investment advice you receive will mostly be detrimental to you. People like to act as if they have the ability to see the future, even though they cannot. You should consider the ambitious predictions on social media in this regard. Although it is not possible to see the future, historical data for cryptocurrencies is likely to give you some ideas. For example, the warning of increased volatility in the past week and the view that the breakout is likely to be downward are examples of these.
The Kobeissi Letter, a popular expert, commented on the current situation as follows;
“This seems to be another sign of the drying liquidity that the markets have seen in the last few weeks.”
The table was gloomy for Rekt Capital. According to him, we are not going to a good place.
“BTC formed its peak at ~31000 dollars in sloping volume. However, the price formed the second half of the double top in declining volume. Despite a small breakout in seller volume in this crash… Current Seller Volume is not close to Seller Exhaustion volume levels seen in previous BTC reversals. In fact, it will likely need to double to reach Seller Exhaustion volume levels that caused price reversals in early March and late June.”
CryptoCon said the following;
“In every cycle, Weekly Bitcoin RSI experiences a fake breakout from the start line of the bull market that lasts longer than others. And each of these revisits the .382 Fibonacci retracement level of the movement. With the recent drop, both of these have been completed.”
Rekt Capital noted that the daily RSI is at the “oversold” level since June 2022 and in the history of Bitcoin, it has only surpassed this level in two periods, both of which were in bear markets.
