Crypto sector selloff in full swing as Bitcoin hits $31k

3 mins read
Crypto sector selloff in full swing as Bitcoin hits $31k
  • Crypto sector lost over $100 billion in a day and dropped below $1 trillion market cap.
  • Bitcoin dipped from all-time highs and reached as low as $30,700.
  • $2.7 billion worth of Bitcoin futures got liquidated in a span of 24 hours.

The crypto market had quite a rough day, as Bitcoin’s price plummet pulled the rest of the market down. The sudden bloodbath was caused by Bitcoin’s inability to break the $42,000 mark, which then prompted a pullback. However, as many investors had their positions heavily leveraged, the price drop liquidated $2.7 billion worth of Bitcoin long positions. As a result of this, most cryptocurrencies scored double-digit losses on the day, while the market as a whole lost over $100 billion at one point.

Bitcoin’s overall sentiment is far more bearish now than it was just a day ago. Many analysts have been predicting a retracement for days now, but the sheer strength of the supply squeeze denied it from happening. The largest cryptocurrency by market cap managed to lose 7.93% over the course of the week, while Ethereum lost 12.66% in the same period.

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Biedex Markets newsletter, today.

BTC/USD chart overview

If we take a look at the daily chart, we can see a clear and steady increase in volume in the past 3 days, similar to the one that happened just days ago when BTC/USD hit the all-time high of $42,000. However, the downturn got stopped by the 21-day moving average, which seemingly pushed Bitcoin’s price up slightly.

The largest cryptocurrency by market cap faces strong resistance at the 23.6% Fib resistance level, sitting at $34,580, while its next strong support level (besides the 21-day moving average) is the $29,985 level.

bitcoin daily chart
BTC/USD daily chart

Looking at the daily time-frame RSI indicator, we can see that BTC/GBP has finally left the overbought territory. Its value is currently sitting at 56.93, and looks like it’s on its way down.

bitcoin hourly chart
BTC/USD 1-hour chart

If we zoom in to the hourly time frame, we can see how big of a role 21-hour and 50-hour moving averages had in this bear run. Bitcoin held its position right above the 21-hour moving average for the whole duration of its bull run. However, the moment it dropped below it and actually confirmed its position, bears took over the market.

The 50-hour moving average played a less of a role (though not an insignificant one) than the 21-hour moving average, and served as the same type of indicator. Ultimately, the largest selloff began after the market found out that the 21-hour and 50-hour moving averages performed a crossover, announcing a short-term bear-dominated market.

Bitcoin is currently trying to recover from the downswing, but the move towards the downside will most likely continue, at least for a short while.