Bitcoin has sent the community in shock by nose diving 11.25% in the past 3 days. It lost almost $12,000 from its value and is currently trading at $94,715 and the crypto market faced a $1.10 billion liquidation. This is a great time for bears while long traders are paying hefty prices. Let’s see what is happening and why crypto market is down today.
El Salvador’s $1.4 B Loan
El Salvador being the first country in the world to accept Bitcoin as a legal tender, has been receiving backlash from traditional institutions. The International Monetary Fund (IMF) has been warning the nation to change their Bitcoin policy. They have been urging El Salvadore to limit public sector exposure to the crypto however, the nation never listened.
Now, there is a deal between the Bitcoin country and the IMF, a loan of $1.4 billion to support their economy. This still has to be approved however, there is a condition, they will have to bring amends to the Bitcoin policy. The country has accepted the proposal. Experts believe this was the major reason for the drop, however charts add more to the story.
The Bitcoin Market Analysis
BTC made a new all time high at $108,364 on December 17 and since then it has been falling. Coinmarketcap shows that the first crypto is down from its ATH by 12.74%. Currency BTC hovers around a daily support level but it would be very difficult to say if it is going to survive here.
However the 4 hour chart says a different story. RSI has dropped below 30, suggesting we should soon see an uprising. This is the perfect moment for whales to refill their bags on discount.
The most interesting thing lies in the daily chart. We are not going to talk about numbers here but just patterns. If you compare the movement of price with RSI movement, you will see it. Even though the price was moving up from $89k all the way to the new ATH, the RSI kept falling down.
This diversion in their movements was giving the alert of this price drop. This should clear the doubts about why crypto market is down today. And as the price is coming down, soon it will balance with RSI and bounce back.
The Damage?
As Bitcoin leads the crypto market, its movements influence alts. With this crash, the crypto space lost around 9.31% of its market cap which is now at $3.21T. The trading activity is up by 13.77%because of the short traders.
The figures say it all. In the last 24 hours, around 334k traders got liquidated and lost around $1.10 billion of funds. The biggest liquidation happened for the ETH/USDT pair with a value of $15.80 million. $929.16 million were lost to long trades as the market took a nosedive.
What to Expect?
The crypto market is full of surprises. The community is expecting Bitcoin to hold its fall and climb back. The market is waiting for big buys now. Whales tend to accumulate assets when the market dips. The current zone is the last remaining support, if the price falls more, it can go to $91,900 that has moving average 20 lying there. These are the times when traders are advised to stay extra aware of the market and protect their funds. Not every time is a good time for trading.
