• Bitcoin dropped below its monthly support of $29K and entered the $28.8K region due to a report by the Wall Street Journal about Binance’s alleged wash trading, as well as warnings from Chinese policymakers.
• Market liquidation occurred following this drop, but analysts still see it as an opportunity to go long on Bitcoin’s price and push it back up to the $30K mark.
• Funds tracking BTC reported outflows amounting to $13M while products shorting Bitcoin continued to see outflows for the 13th consecutive week totalling $5.5M.
Bitcoin Drops Below Support Line
Bitcoin has finally shown a clear trend, though not one that bulls were hoping for – slipping below its monthly support of $29K and reaching the $28.8K mark. This bearish swing led to a massive market liquidation today.
Causes of Drop
The decline in Bitcoin’s price was caused by a report by the Wall Street Journal that Binance’s CEO allegedly indicated in private that their affiliates had engaged in wash trading some years ago. Additionally, warnings from Chinese policymakers about a challenging economic recovery without substantial stimulus also contributed to the decline.
Market Liquidation
Following this drop, both short and call holders experienced heavy liquidations while long positions were most affected with total amount surpassing $41 million in liquidations compared to put positions experiencing minor decrease in liquidation ($3 million). There were also outflows amounting to $13M from funds tracking BTC and products shorting Bitcoin saw outflows for 13th consecutive week totalling $5.5M. Investors are now favouring Ethereum over Bitcoin evidenced by inflows into Ethereum of around$6.6M .
Opportunity For Bulls?
Analysts are viewing this dip as a prime opportunity for bulls take charge and push bitcoin back up towards its previous levels of around $30k . They hope that they can capitalize on this situation and turn the tables around for bitcoin’s future prospects .
Conclusion
Despite this recent slip , overall sentiment remains positive about bitcoin’s future trajectory , with many investors optimistic about its potential growth over time . Therefore , there is hope that bitcoin will make a strong comeback soon enough if bulls play their cards right .
