Analysts say Bitcoin is set to fall below $40,000
On Monday, Bitcoin’s value plunged over 15%, momentarily breaking below the $50,000 mark amid fears of a looming US economic downturn and escalating geopolitical unrest in the Middle East. This occasion marked Bitcoin’s descent under this significant benchmark for the first time since February, before it managed to recover to approximately $52,000.
Analysts are cautioning that the digital currency might endure further declines.
Recent evaluations from CryptoQuant predict a potential drop for Bitcoin to the $40,000 range, indicating a tough phase ahead for investors. The cryptocurrency analytics firm pointed out that traders are now seeing their highest levels of unrealized negative profits since November 2022.
This downturn captures a drastic change in the market’s mood, underscored by heightened sales drives as traders attempt to offset losses amid a shaky economic horizon.
In the wake of Bitcoin’s substantial slump, its share of profit-earning holders fell to 75%, as noted by IntoTheBlock. This represents a notable descent and the minimum percentage observed since January when Bitcoin’s value established a local low near $39,000.
Bitcoin was not the sole casualty of severe market sell-off. Ethereum’s value dwindled by more than 22%.
The market’s turmoil led to the liquidation of futures tied to cryptocurrencies amounting to $1.08 billion over the last day. CoinGlass’s aggregated data reveals that long position liquidations totaled $919.62 million, whilst short positions comprised $162.45 million of the liquidations.
Bitcoin faced the brunt of these liquidations, with over $371 million cleared out, including $310.26 million in longs and $61.22 million in shorts. Ethereum was closely behind, with its liquidations nearly hitting $353 million during the same interval, featuring $303 million from long positions and $49.6 million from short positions. Solana and Dogecoin also witnessed significant liquidations, tallying up to $60.91 million and $13.14 million, respectively.
The chaotic 24-hour period also saw 283,280 traders getting liquidated, with the largest single liquidation order on Huobi involving a BTC-USD pair valued at $27 million.
This dramatic downturn led the cryptocurrency fear and greed sentiment index to dip into a state of “fear,” marking its lowest point since the early days of July.
