Why Bitcoin is Going Down and How Low It Can Go?
Bitcoin is showing intensifying bearish signs amid heightened market greed. In the past 24 hours, the overall market value of cryptocurrencies fell 5.44% to $3.43 trillion. Liquidation levels in the past 12 hours have reached an all-time high. But why is this happening when everyone is so optimistic about the market and how much Bitcoin could fall? Are you wondering why Bitcoin is down today? Let’s analyze what is happening in the market.
High greed brings high risks
If you’ve been in the cryptocurrency space for a while and have seen at least one cryptocurrency cycle, you’ve seen things like this happen before. When the market enters a highly greedy mood for multiple days in a row and people are satisfied with the bull run, it pulls back. Traders and the market are always a contest between traders and the market. Who is more powerful? Obviously the market. Seasoned professionals always advise people to be fearful when the market is greedy. These periods are the perfect time for the market to take money away from traders.
Technical aspects of Bitcoin
Bitcoin has fallen by approximately 13.60% after facing rejection of the new ATH. It doesn’t close there though, just a shadow when it comes out. The asset held steady and tried to rise again, but failed. BTC remained above the 20 moving average for quite some time before falling below it on December 9, triggering panic in the market. Thereafter, Bitcoin fell below the 50 moving average and then the 100 moving average. This was enough of a shock to the market.
BTC is currently trading at $96,607, down 2.90% in the past 24 hours. Trading volume surged 118% as traders began shorting the asset. How much further can it fall? It’s hard to say, though, as the most recent area of strength is at $92,600, with the 200 moving average also holding this level, making it even stronger.
RSI levels drop sharply. The price is currently at 38.08, which is not good for the bulls but is definitely a comfortable time for short traders. The Average Directional Index of 16.44 also shows that bears are taking control of the market.
Other indicators
According to Coinglass’ liquidation data, a total of $1.75 billion worth of liquidations occurred in the past 24 hours. Most of the liquidations were among long traders as the market changed positions following Bitcoin’s decline. More than 500,000 traders lost funds due to these liquidations.
Whale order and large trade data from Coinglass shows that while the market appears greedy, long traders are actually operating in fear. There are almost no long orders in this price range and whales are shorting BTC. The optimal amount for longs is between $92,000 and $94,000. Does this mean cryptocurrencies could fall more? Yes, this could happen if the market fails to get more strong buying.
what happens?
Downturns during bull markets bring desperate moments. The Greed and Fear Index shows high levels of greed and indicators point to an impending downtrend, making everything confusing. Note that markets tend to move in the opposite direction where sentiment is highly saturated. As more and more people short the asset, Bitcoin will suddenly start rising again. If you are considering entering the market for trading, you are advised to be extremely vigilant in order to save your money. High levels of greed in the market are responsible for Bitcoin’s decline.
