Bitcoin, the world’s largest cryptocurrency, experienced a brief downturn, dipping below the $65,000 mark as long-term holders initiated selling. The recent price movement marks a significant shift in market sentiment, with various factors contributing to the downward pressure on Bitcoin’s price.
At the time of publishing, Bitcoin’s price stands at $65,574.10 USD, reflecting a 5.89% decrease from the previous day. The cryptocurrency witnessed a notable decline of over 7.1% within the past day, slipping below the $65,000 threshold for the first time since March 24.
The current week, historically recognized as one of the worst for Bitcoin’s price performance, has seen the cryptocurrency struggle to maintain its upward momentum. According to Coinglass data, Bitcoin typically experiences an average decline of 8.33% during the 14th week of the year, adding to the prevailing bearish sentiment.
Despite trading volume surging by over 75% to $46 billion, Bitcoin’s price failed to sustain its upward trajectory. Popular crypto analyst Rekt Capital suggests that Bitcoin’s failure to pass its post-breakout retest could lead to continued slowing momentum, particularly as the Bitcoin halving approaches.
Concerns over potential liquidation loom as Bitcoin’s price hovers around the $65,000 mark. Coinglass data indicates that over $249 million worth of long leveraged positions would face liquidation if Bitcoin’s price were to drop to this level.
However, the recent correction has reset several key metrics, including the relative strength index (RSI), which fell to 48 on the daily timeframe. This suggests that Bitcoin is no longer overbought, providing a semblance of stability amidst the market turbulence.
The correction in Bitcoin’s price can largely be attributed to the influx of newcomers in the market, particularly since the approval of the United States’ spot Bitcoin exchange-traded funds (ETFs). According to Andrey Stoychev, head of Prime Brokerage at Nexo, the substantial gains witnessed in recent months have prompted profit-taking among new investors, contributing to the current downturn.
Stoychev anticipates a short-term correction fueled by latecomers seeking to capitalize on Bitcoin’s upward trajectory. However, he remains optimistic about the cryptocurrency’s long-term potential, drawing parallels to previous bull markets and emphasizing the cyclical nature of market dynamics.
As Bitcoin navigates through a period of heightened volatility, market participants remain vigilant of key support levels and potential liquidation thresholds. While short-term fluctuations may impact market sentiment, the resilience of Bitcoin remains evident, as demonstrated by the recent sell-off by long-term holders.
