Be Prepared for Market Crash as Bitcoin Price Shatters Support Get Ready for What Lies Ahead
Bitcoin’s price has dropped below $62,000, leading to losses for investors and causing a ripple effect across the cryptocurrency market. The total market capitalization has fallen from $2.35 trillion to $2.26 trillion in the past 24 hours, resulting in a collective loss of about $160 billion for investors within a week.
Investor sentiment has shifted from extreme greed to neutrality, as indicated by the fear and greed index dropping from 76 to 51. Bitcoin’s price has fallen over 3%, reaching a low of $62,258 due to ongoing selling pressures. Traders are closely monitoring the support level of $61,000, which has been observed previously in April and May.
Market data shows high volatility and risk aversion among traders, with $170 million in liquidations today. A significant sell-off on BitMEX involving a whale selling XBTUSD holdings worth $10 million has added to the market turbulence.
The downturn in Bitcoin’s price has also affected other cryptocurrencies. Ethereum has dropped 4% to $3,366 in the last 24 hours, with other major altcoins like Solana, XRP, and Dogecoin experiencing losses ranging from 3% to 6%. Meme coins and AI-driven cryptocurrencies, such as dogwifhat (WIF), have seen significant drops, with dogwifhat plummeting by 14%.
Analysts and market data suggest ongoing uncertainty ahead of key economic events, such as US PCE inflation data and monthly options expiry. There are concerns that Bitcoin could potentially drop to $50,000 due to a double top pattern and continuous outflows from spot Bitcoin ETFs. Managing risk is crucial in navigating volatile market conditions and identifying potential market peaks and false breakouts.
Investors are advised to proceed cautiously as Ethereum breaches key support levels and Bitcoin enters a downtrend phase. The expiry of 105,000 BTC options contracts worth $6.72 billion on June 28 is anticipated to have a significant influence on the market. With a put-call ratio of 0.52 and a max pain point set at $57,000, these factors suggest that Bitcoin could face continued selling pressure in the near term.
Given the cryptocurrency market’s known cycles of rapid growth and correction, effective risk management is essential for navigating uncertain times. Investors are urged to stay informed and vigilant as market dynamics evolve.