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Bitcoin price drops to $34,000

Bitcoin (BTC) drop below $36,000 “smacks of capitulation”, trader says as suspicion mounts over US stock markets.

In a tweet on May 6, Cointelegraph contributor Michael van de Poppe He suggested that the price of BTC was giving at least “serious signs.”

Analyst: Stocks saw a ‘forced liquidation’

After plummeting to 10-week lows in line with stocks in the May 5 Wall Street trading session, bitcoin price bounced back to levels last seen in february.

The fall of both cryptocurrencies and stocks, which followed an initial rebound the day before on expectations of rate hikes by the Federal Reserve, appeared to be more than traders expected.

The S&P 500 ended the day down 3.5%, while the Nasdaq 100 finished down 5%. In addition to stocks, 10-year US Treasury futures fell 1%an unusual combination that gave some market participants pause.

Jason Goepfert, founder of Sundial Capital Research, noted that Such a chain of events had only occurred twice in the last quarter century: during the 2008 global financial crisis and the March 2020 COVID-19 crash.

“Someone is exploding, and this is a forced liquidation,” said to his Twitter followers.

Therefore, The chain reaction that bitcoin has sparked may be the capitulation event that many had previously said was necessary as a result of changing economic conditions in the United States.

“That smacks to me of capitulation or at least some serious signs in general,” Van de Poppe said.

He pointed out that the drop had also produced the highest volume 4-hour candle since early December in BTC/USD. As Cointelegraph recently reported, volume was a key aspect that needed to come back to produce a more compelling capitulation event.

The data of Cointelegraph Markets Pro and TradingView, meanwhile, they showed relative calm returning to bitcoin markets overnight.

BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView

BTC Long Liquidations Approach January Highs

Nevertheless, assessing the impact of the drop on investors, it appears that the day’s losses have not caused a full market reset.

Liquidations were fairly quiet across all cryptocurrencies, with BTC accounting for $190 million during the 24 hours of writing this report. This was the highest daily figure in several monthsbut did not break through January’s waterfall of $32,000.

The remaining $200 million came from altcoin pairs, according to data from the on-chain monitoring resource Coinglass.

Cryptocurrency liquidation chart. Source: Coinglass

“Regardless of what it ever says in the short term, the macro is still bearish,” summarized the popular trader Crypto Chase about scenery:

“There will be bounces, pops, squeezes, short-term euphoria, you name it…but I don’t think we’ll see a macro reversal before a larger capitulation OR the Fed backtracking on its rate hikes/QT/rate cut balance.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading involves risk, so you should do your own research when making a decision.

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