Bitcoin Plunges Below $68,000, Traders Eye DeFi Liquidation Trends for Big Potential Rebound

• Bitcoin fell almost 5% in the last week of trading, with its price falling to US$67,000.
• BTC has strong support at $66,000 that has yet to be retested, although it may not be far away.
• Santiment’s analysis suggests that the current BTC downturn may not resolve for some time, as DeFi balances have yet to be liquidated and incorporated into the decline.
• However, most experts believe that it is only a matter of time before Bitcoin emerges from its crisis.

The past month has been eventful for Bitcoin. After two strong rises during which BTC broke the US$70,000 (AU$105,000) barrier again, the cryptocurrency has been between this ceiling and its support level at US$66,000 (AU$100,000). In recent days, the digital currency has fallen by 4.65% in less than a week of trading.

So, is the current downward trend a cause for concern? Or is this simply a continuation of the push/pull between buyers and sellers that has been occurring since BTC broke its all-time high earlier this year?

Bitcoin (BTC), 7-day chart, source: CoinMarketCap

Related: Analyst reveals several reasons why Ethereum could reach a valuation of $150,000 per ETH

Here are two main reasons why Bitcoin is not on the rebound…yet

According to data analytics firm Santiment, a crypto rebound could still take a few days (or weeks) of trading.

For what?

Well, the company associates a few key indicators with trend reversals that are missing from today’s market.

First, the number of BTC buy calls (posted on social media) actually increased following the coin’s price decline. While typical logic suggests that more buyers = more price increases, the truth can sometimes be mysterious when it comes to crypto.

Santiment believes that increased FUD and desperation may be a signal of a crypto rebound as seasoned, unemotional investors capitalize on panicked sell orders.

Likewise, an in-depth analysis by Santiment of on-chain metrics found that DeFi liquidations are relatively stable. In the past, massive sales on platforms like Aave or Compound have led to market rebounds.

So even though these numbers remain stable, it suggests that BTC may not be on the verge of a breakthrough, as traders are not yet ready to buy a “cheap” price dip.

However, there is no reason to despair. Despite the current bearish trend, BTC is still up 10% over the past month, which is an excellent return by any measure.

Given its importance in the upcoming election, it would take a brave soul to bet against Bitcoin’s continued upward trend through the second half of 2024.

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