Bitcoin's recent plunge to $59,000 has left many wondering what's behind the drop. The main culprits seem to be short sellers dominating the market, creating significant selling pressure, and a lack of interest from exchange-traded funds (ETFs) traders ¹. Additionally, CryptoQuant's negative funding rates and a negative flow of 1.77K BTC in the US spot Bitcoin ETF for the second consecutive day haven't helped ¹.
Key Factors Contributing to the Decline:
- Regulatory Scrutiny: Increased regulatory attention has likely contributed to the downturn ².
- Institutional Withdrawal: Reduced institutional interest has also played a role ².
- Whale Selloffs: A significant selloff was triggered by a whale moving 2,300 BTC to Kraken, worth approximately $141.81 million ².
Technical Analysis:
Bitcoin's daily chart looks bearish, trading below the 200 Exponential Moving Average (EMA) ¹. If the price falls to $58,500, approximately $421 million worth of long positions could be liquidated ¹. However, if Bitcoin holds above $58,000, there's a chance of price reversal ¹.
Market Sentiment:
Fear and uncertainty prevail among traders, with a 30% drop in trading volume and a 3.1% decline in open interest ¹. Keep in mind that market conditions can change rapidly, and it's essential to stay informed.
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