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Bitcoin Falls Below $29K as The Crypto Market Winter Continues
The price of Bitcoin fell to its lowest level in over 16 months on Thursday as a massive sell-off in digital assets continued. The impact could have been birthed from geopolitical crises such as Russia-Ukraine woes, rising inflation, and shifting U.S. monetary policy.
Exchange Inflows Increase
The global crypto market cap is $1.26T, a 5.36% decrease over the last day. A massive sell-off in cryptos wiped over $200 billion worth of digital assets from the market in just 24 hours.
On Wednesday, 80,000 bitcoins were transferred from various entities to exchanges, making it one of the biggest single-day transfers in history, according to TrustNodes. Inflows are usually caused by people looking to sell their assets, while outflows are generally caused by traders moving their tokens to storage.
The value of the transaction was around $2.3 billion at current prices. This value represents a 5x increase from the 15,000 sent daily during the start of the month, making it one of the most volatile days in the history of cryptocurrencies.
The uptick in the volume of exchange transactions in Bitcoin could be a sign of a potential capitulation, similar to what happened during the previous price bottoms. Bitcoin’s trading volume also exceeded its previous peak in January, and sentiment indicators show extreme pessimism among traders. It suggests that the market is likely to rally.
Bitcoin Falls Below 30K
Bitcoin is currently trading at $29,193.18, 5% lower than yesterday. Over the past week, the top crypto by market cap has lost 21% of its value. After experiencing a recovery wave, the price of Bitcoin attempted to reach the $32,000 level. However, it failed to sustain its gains and started a fresh decline./
The price moved below the key $30,000 support area and declined to the $29,500 level. It eventually hit a new multi-week low of $27,700. The decline from the previous high was also accompanied by a move below the 100 simple moving average.
Edul Patel, CEO and Co-founder of Mudrex, has said,
“Bitcoin traded at its lowest at US$28,000 in the past 24 hours, which is the weakest in the past two years. BTC fell nearly 11 per cent with increasing selling pressure. BTC may likely break below the current level.”
“Along with several macroeconomic factors, the downfall of the stablecoin UST has also impacted the crypto market to a great extent,” Patel said. The U.S. dollar’s peg to the UST stablecoin temporarily lost its value over the weekend. Following that, the value of the LUNA governance token, which is used to maintain the stablecoin’s $1 value, dropped by 99.40% from yesterday.
More BTC Losses?
The price action has been very negative in the last few days, with the bears targeting the $30,000 resistance zone. On the hourly chart of the pair, the price is below the 50% Fib level of the decline from the high of $32,132 to $27,700. There is also a key trend line forming at $31,000.
The next resistance level for the pair is around $31,500, which is a key area that could act as a support. On the other hand, the key breakout zone is approximately $32,000, suggesting that the price could start a recovery wave.
If bitcoin continues to move down, it could reach the $28,200 support area. The next major support is around $27,700, which could act as a support for the bears. A break below this level could trigger a move towards the $27,200 support. On the other hand, a bounce-back above this level could lead to the $26,500 support zone.
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