Bitcoin
With Bitcoin Below $56K, Why Is the Crypto Market Dropping Today?
With a 4% drop on Sunday, bears overcame Saturday’s recovery in Bitcoin and pushed the altcoin market back into bear territory. Undermining the chances of a week-long recovery, the increased supply is driving a Monday drop in early Asian trading hours.
Bitcoin is trading at $55,269 with an intraday loss of 1.30% and is trading at a low of $54,296. With a bearish tone, altcoins are starting the week with long liquidations, and major cryptos are down 5% or more.
Ethereum, Solana, and Toncoin dropped 5.25%, 7.23%, and 5.45% respectively, while meme coins took a massive hit. DOGE, SHIB, and PEPE dropped 8.08%, 7.64%, and 12.84% respectively.
With Monday Blues hitting the cryptocurrency market hard, anticipations of a bigger drop this week are rising. Let’s take a look at our detailed price analysis of the top cryptocurrencies for a clearer view of the market.
You can also check out our Bitcoin Price Prediction to determine the chances of Bitcoin hitting the $100,000 mark this year.
Bitcoin Price Performance
With zero follow-up to Saturday’s recovery, Bitcoin’s downtrend continues. Breaking below the $56,000 level, BTC is trading at $55,269, down nearly 5% in the past 24 hours.
Adding to the bearish influence on the daily chart, BTC price breaks below the descending trendline. The 4% drop on Sunday creates a bearish engulfing candle and resets the moving downtrend.
Totaling $111 million in long liquidation in the broader market on Sunday, the trend continues with $75 million in the early hours of Monday. With price action signaling a continuation of the downtrend, the long liquidations reinforce bearish traders.
Bitcoin Hash Rate Drawdown Reaches Critical Levels
Bitcoin’s 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 reductions have coincided with major price movements. The December 2022 reduction preceded a notable bullish reversal, suggesting that current conditions could signal a similar price move.
As Bitcoin’s price drops, the deep hash rate drop could indicate a market bottom or an imminent bullish phase. However, this goes against the ongoing price action movement as BTC price drops below the $56,000 mark.
While the next support level is at $52,000, it could be the next recovery point to start the bullish rally towards the $100,000 target.
Mt. Gox payout continues to cause market jitters
Following the collapse of cryptocurrency exchange Mt. Gox in 2014, the recent payment scheme has induced significant fear among investors. After a decade-long wait, the refund process has begun and is quickly bringing fears of a massive supply dump in the near future.
According to the latest filing from the trustee, Mt. Gox creditors will receive Bitcoin (BTC) or Bitcoin Cash (BCH) in the next 2 weeks or 3 months. This will depend on the exchange they choose. While Kraken could take up to 3 months, other exchanges such as Bitbank and SBI VC Trade are aiming to complete the payments in the next 2 weeks.
This payment is intended to prevent a major price drop, although the distribution of around $2.71 billion in BTC could still cause market jitters.
Where is Bitcoin headed this week?
With the ongoing FUD race in the crypto market, the bearish movements are likely to continue this week. With Bitcoin breaking below $56,000, the next plausible support lies at the $52,000 mark. Furthermore, the downtrend increases the possibility of a death cross of the 50D and 200D EMA.
To amplify the decline, altcoins could witness a massive drop and larger liquidations this week.