Bitcoin continued its correction process, which has been ongoing in recent weeks, at the beginning of the week, and the price quickly fell below 65 thousand dollars, falling to the lowest levels of the recent period. The price movements of the cryptocurrency witnessed a sharp decline, especially on the weekend and Monday, in the low liquidity environment, and a loss of up to 5 percent was experienced in a short time.
Technical Support Levels and Market Dynamics
Rather than a single obvious development, the decline occurred due to fatigue in technical indicators, the decrease in demand and the risk aversion trend in global markets. As the Bitcoin price fell below the $65,000 support zone, support levels in the $60-62,000 range came to the fore again. These levels have historically been known as critical thresholds for short-term volatility.
Corporate Acquisitions and the Course of Transaction Volume
Throughout Monday and Tuesday, price fluctuation in Bitcoin continued in a narrow band. Trading volumes in the spot market remained weak compared to recent months, and investors remained risk-averse due to the lack of a new catalyst in the market. Strategy company, managed by Michael Saylor, purchased Bitcoin for the 100th time despite the price drop and added approximately 592 BTC to its portfolio. The average purchase price was announced as $67,286.
Although corporate investments continue, short-term optimism has not yet become evident across the market. Bitcoin’s failure to exceed the $65,000 level in a short period of time may pave the way for the $60,000 test. A new break in this band may increase selling pressure, especially among short-term investors.
Outlook on Futures and Derivatives Markets
The current volatility in Bitcoin is associated with conditions of increased uncertainty and reduced liquidity in the global economy. Unchained’s market research director, Timot Lamarre, emphasized the sensitivity of cryptocurrency to events and liquidity around the world. Lamarre noted that the understanding of Bitcoin as the most reliable asset in a chaos environment is still not sufficiently adopted:
Bitcoin remains a global indicator in terms of world events and liquidity. Decreasing liquidity and violent conflict are putting pressure on the Bitcoin price. The advantage of being able to move wealth without counterparty risk is not fully understood.
A careful and defensive positioning is observed in derivative markets. In their evaluation, the Bitfinex team pointed out that the absence of intense long positions in the market as in the past prevented sharp downward liquidations, but pointed out that under these conditions, it became difficult for upward movements to gain momentum quickly:
The derivatives market is now in a more defensive balance. The risk of downside liquidation created by heavy long positioning in the past has been significantly reduced. However, this means that upward movements cannot be fueled only by closing short positions. For a permanent and strong recovery, it will be necessary to stabilize funding conditions and see a real revival in spot demand.
Recent price movements and low transaction volumes showed that cautious expectations and uncertainty continue in the markets. Parties who closely monitor the course of the market point out that volatility may increase if critical support areas are retested.
