Due to recent market conditions, the BTC price has taken a sharp bearish turn, touching the ground at a staggering $25.5K. The trigger for this massive decline was the recent lawsuit faced by Binance, one of the world’s largest cryptocurrency exchanges, against the U.S. Securities and Exchange Commission (SEC). This triggered investors to sell off their positions due to panic, which brought a downturn in the crypto market today.
Bitcoin is Yet to Hit Its Bottom Level
Just when market experts were predicting a potential price surge for Bitcoin (BTC), the cryptocurrency market witnessed a downturn following the SEC’s charges against the Binance exchange. This development has led some analysts to speculate that Bitcoin’s price has not yet hit its lowest point.
Recent data indicates a substantial decrease in exchange inflows for major cryptocurrencies. Exchange inflow refers to the quantity of coins deposited into exchange wallets.
On-chain analytics firm Glassnode has highlighted this trend for cryptocurrencies such as Bitcoin, Ethereum, BUSD, USDT, USDC, and DAI. The data reveals that exchange inflows for these significant assets have been remarkably low, standing at around $1.84 billion. This figure is approximately $10.36 billion less than the peak inflow seen during the May 2021 sell-off.
This reduction signifies an approximately 85% decline from the peak nearly two years ago. Market analysts believe this trend is primarily due to recent capitulation and exit liquidity events. It’s important to note that large inflows typically indicate a bearish sentiment while decreasing values suggest the contrary.
Tracker data from Coinglass reveals that trading positions amounting to nearly $250 million – primarily from traders who anticipated a price increase – have been liquidated in the past four hours.
What to Expect from BTC Price Next?
On the daily chart, Bitcoin’s (BTCUSD) price has slipped below the crucial $27,000 threshold, indicating a bearish trend. Traders should now turn their attention to the immediate support level at $25.5K and the RSI level to determine the upcoming move.
After forming a low at $25,566, BTC price witnessed a slowdown in decline, hinting that bulls emerged to defend the support level and hold the price for a bullish reversal. Currently, there’s a strong battle to push the BTC price below $25K as the market conditions head toward bearish sentiment following SEC’s lawsuit.
If Bitcoin continues to witness more downward pressure near the $25,544 level, the asset may plunge again following a massive selloff from short-term investors. On the bearish side, the next support for the BTC price will be at $24K.
However, on the bullish side, there is a potential for a rebound if BTC’s price reverses its current trend and surges above the 38.6% Fib level. A surge toward $26,918 will send the price above $27,409.