Found an error?
Report now
The Bitcoin price is under pressure - the picture shows a vending machine in the USA. (archive image)
sda
Bitcoin is under massive pressure. The world's largest cryptocurrency has lost double digits in just a few days and is now trading at around 50 percent below its record high. Analysts now see a crucial support zone, the breach of which could trigger further selling.
The past few days have been painful for Bitcoin investors. The cryptocurrency lost around twelve percent of its value within a week and at times fell to just over 60,000 dollars.
Since peaking at around 126,000 dollars last fall, the price has almost halved. Nervousness on the crypto markets is increasing accordingly.
The situation is particularly critical because important technical markers are coming under pressure. The analysts at 21Shares see the area around 60,000 dollars as crucial support. This is where both the 200-week average and important valuation indicators for the market are located.
From 21Shares' point of view, the latest wave of selling did not come about by chance.
The news that the software company Strategy had sold Bitcoins for the first time in years initially caused uncertainty. Admittedly, this only involved 32 Bitcoin worth around 2.5 million dollars. Measured against the company's gigantic holdings, the transaction was hardly economically relevant. Nevertheless, it had a negative impact on market sentiment.
In addition, there were massive capital outflows from the American Bitcoin ETF. According to 21Shares, around four billion dollars flowed out of the products over twelve consecutive trading days. This meant that inflows for the year as a whole turned negative again for the first time.
At the same time, leveraged long positions amounting to almost three billion dollars were liquidated within a few days. Such forced sales often additionally reinforce price movements.
Geopolitical tensions also played a role. Talks with Iran have recently deteriorated significantly. At the same time, oil prices rose after Tehran threatened to block the Strait of Hormuz.
The Bitcoin price crashed last year.
Screenshot Bison
At the same time, more and more capital is flowing into the boom in artificial intelligence. While technology stocks in the US and Asia are rushing from record to record, Bitcoin is increasingly being left behind.
Analysts see this as an important reason for the current weakness. Investors currently prefer AI stocks to cryptocurrencies.
Despite the heavy losses, the analysts at 21Shares do not yet see any signs of a capitulation as in previous bear markets.
Long-term investors continue to hold large positions, and the outflows from Bitcoin ETFs have not yet led to a mass liquidation of institutional positions. In addition, the amount of stablecoins in the crypto market continues to grow, which could indicate available capital for future purchases.
In the short term, however, the focus is on a single mark: the zone around 60,000 dollars. As long as it holds, there is a chance of stabilization. If it falls sustainably, the discussion is likely to quickly turn to significantly lower price targets.
