Markets
With Bitcoin Below $56,000, Why Is the Crypto Market Crashing Today?
With a 4% decline on Sunday, bears have overturned Bitcoin’s Saturday rally and pushed the altcoin market back into bear territory. Undermining the chances of a week-long recovery, the increased supply is influencing a Monday crash in early Asian trading.
Bitcoin is trading at $55,269 with an intraday loss of 1.30% and records a low at $54,296. In a bearish tone, altcoins are starting the week with long liquidations and major cryptocurrencies are down 5% or more.
Ethereum, Solana, and Toncoin are down 5.25%, 7.23%, and 5.45%, respectively, while meme coins are taking a hit. DOGE, SHIB, and PEPE are down 8.08%, 7.64%, and 12.84%, respectively.
With the Monday Blues hitting the cryptocurrency market hard, expectations of a bigger crash this week are rising. Let’s look at our detailed price analysis of the major cryptocurrencies for a clearer view of the market.
You can also check out our Bitcoin Price Prediction to determine the odds of Bitcoin hitting the $100,000 milestone this year.
Bitcoin Price Trend
With zero follow-up to Saturday’s recovery, the downtrend in Bitcoin continues. Dropping below the $56,000 level, BTC is trading at $55,269, down nearly 5% in the last 24 hours.
Increasing the bearish influence on the daily chart, BTC price falls below the descending trend line. Sunday’s 4% decline creates a bearish engulfing candle and restores the moving downtrend.
With $111 million in long liquidations in the broader market on Sunday, the trend continues with $75 million in early Monday. With price action signaling a continuation of the downtrend, long liquidations are strengthening bearish traders.
Bitcoin Hashrate Drop Reaches Critical Levels
Bitcoin network hashrate drawdown is a measure of declines in mining activity. According to Cryptoquant, the metric has fallen to levels last seen in December 2022.
Historically, such hashrate drops have coincided with major price movements. The December 2022 drop preceded a notable bullish reversal, suggesting that current conditions could signal a similar price move.
As Bitcoin price crashes, the deep drawdown in hashrate could signal a market bottom or an upcoming bull run. However, it goes against the current price action as BTC price drops below the $56,000 mark.
While the next support level is at $52,000, it could be the next stepping stone for the bullish rally to begin towards the $100,000 target.
Mt. Gox Payout Continues to Induce Market Nervousness
After the collapse of the Mt. Gox crypto exchange in 2014, the recent payout scheme has induced considerable fear among investors. After a decade-long wait, the refund process has begun and is quickly bringing with it the fear of a massive dumping of supply in the times to come.
According to the latest trust document, Mt. Gox creditors will receive Bitcoin (BTC) or Bitcoin Cash (BCH) in the next 2 weeks to 3 months. It will depend on the exchange they have chosen. While Kraken could take up to 3 months, other exchanges like Bitbank and SBI VC Trade aim to complete the payments within the next 2 weeks.
This payout is intended to prevent a major price crash, although the distribution of approximately $2.71 billion in BTC could still cause market jitters.
Where is Bitcoin headed this week?
With the ongoing FUD run in the cryptocurrency market, the bearish moves are likely to continue this week. With Bitcoin falling below $56,000, the next plausible support is at the $52,000 level. Furthermore, the downtrend increases the possibility of a death cross of the 50D and 200D EMAs.
Amplifying the collapse, altcoins could see a massive crash and even bigger liquidations this week.
Read also: Bitcoin, Ethereum, XRP Price Prediction: Has the Bullish Rally Resumed?