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Why has the crypto market rejected Bitcoin at $64K?

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  • Bitcoin climbed as much as 14% late Wednesday, briefly reaching $64,000 — its first move above $60,000 since November 2021 — before retracing some of its gains.
  • The bitcoin price rally fell with major liquidations that have affected crypto traders. With that, BTC is trading at around $62K.
  • The market decline coincides with the United States government’s $1 billion Bitcoin transfer, asserting a forceful market correction.

Bitcoin’s rejection at the $64,000 mark has raised questions about the dynamics within the cryptocurrency market. Despite its upward momentum, several factors could contribute to this rejection. BTC’s rapid ascent to $64,000 led to an overbought market. Investors began to worry about the sustainability of such high prices without substantial corrections.

Bitcoin rejection at $64K has consequences

BTC’s frenzy commenced in March, and its frenetic activity on Thursday has positioned it for its most substantial monthly increase in nearly three years. An enormous gain is being fueled by capital flooding into listed bitcoin funds, and the crypto is currently on the verge of setting a new record high.

Bitcoin, the largest crypto in the world, has been experiencing an unrelenting price increase, reaching $64,000. Notably, the Bitcoin price is currently hovering around 10% away from attaining a record high, a development that has generated considerable anticipation among investors.

Investors are rushing to purchase cryptocurrencies out of “fear of missing out” on prospective price increases. This brings to mind the crypto bull market of November 2021, which propelled the primary cryptocurrency asset to a record high of approximately $69,000.

BTC has more than quadrupled in value since the start of the year, recouping from a 64% decline in 2022. Following a series of controversies and insolvency, which had cast doubt on the sustainability of digital assets, that is an astounding recovery.

In the interim, the abrupt price fluctuations have whipsawed both bulls and bears.

Ahead of the halving event in April, which occurs every four years and halves the rate of token production and the rewards paid to miners, an increasing number of traders have begun to invest in BTC.

In the midst of the chaos, crypto traders have witnessed liquidations totaling $638 million in the last twenty-four hours, with $391 million happening within the last four hours.

Coinglass reports that approximately $55 million of liquidations in the last hour affected a consortium of obscure altcoins, whereas $96 million was liquidated directly on BTC transactions.

In the interim, liquidations cost ETH traders $45 million and DOGE traders $29 million.

During the last twenty-four hours, 168,988 traders were liquidated in total. The largest single liquidation, $9.45 million, occurred on OKX during a BTC-USDT transaction.

Bitcoin’s market performance

As of this writing, the current value of Bitcoin (BTC) is $61,300.59, reflecting a 1.9% decrease since yesterday and a 0.6% increase from an hour ago. As of today, Bitcoin has gained 20.0% in value in comparison to its value seven days ago.

As of now, the value of cryptocurrencies on the global market is $2.39 trillion, representing a change of -0.09% over the last twenty-four hours and 111.5% over the past year. At present, Bitcoin (BTC) holds a market capitalization of $1.2 trillion, indicating a dominance of 50.34%. Stablecoins, meanwhile, have a market capitalization of $143 billion, or 5.99%, of the total crypto market capitalization.

According to CoinGlass data, the abrupt decline in prices resulted in millions of liquidations for all digital assets within just over twenty-four hours, wiping out leveraged derivatives trading positions.

Liquidations happen when an exchange terminates a leveraged trading position as a result of a complete or partial loss of the initial capital outlay, also known as the “margin,” by the trader. This occurs when the trader fails to satisfy the margin requirements or lacks sufficient funds to maintain the trade open.

The action on Wednesday and Thursday was presumably the most significant loss since August of last year, when the abrupt decline of bitcoin to $25,000 destroyed $1 billion worth of derivatives positions across all cryptocurrencies.

Short positions (bets on prices to fall) and long positions (bets on higher prices) were both affected equally by the liquidations, as crypto prices surged and then declined.

Ali Martinez, a crypto analyst, asserts that Bitcoin does not encounter any substantial resistance in the near future. Conversely, a significant level of support is apparent within the price interval spanning from $54,300 to $56,200. A total of 903,540 addresses have amassed nearly 500,000 BTC within this specified range, which serves as an indication of robust purchasing activity and further strengthens the Bitcoin support levels.

The market decline coincides with the United States government’s $1 billion Bitcoin transfer. This may indicate that the United States government is prepared to apply selling pressure on Bitcoin. The $1 billion in sell-offs represents less than 0.01% of the total market capitalization of Bitcoin. 

Edward Snowden, a whistleblower, speculated, however, that the United States government could be acquiring Bitcoins covertly this year in an effort to reduce the national debt.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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