Bitcoin Experiences a Significant Decline of 6.5% in Two Days
In a surprising turn of events, the Bitcoin price has plummeted by 6.5% over the last two days, raising questions about the possibility of a more severe downturn. After reaching a high of $88,000 at the start of the week, the current value of BTC has dropped to around $82,362.
Recent data from Cointelegraph Markets Pro and TradingView indicates that Bitcoin‘s value fell from $87,500 on March 28 to a low of $81,900 on March 29. This decline coincides with a broader market downturn, driven by uncertainties related to Trump’s trade tariffs and disappointing economic reports. As stock markets falter, investors are left pondering how much further this decline could extend.
Bitcoin’s Price Plummets, Liquidity Diminishes
On March 29, Bitcoin continued its downward spiral, losing an additional 3% in just 24 hours, trading slightly above $82,000.
Key Takeaways:
- The price of BTC reached a low of $81,983 on Bitstamp, effectively erasing all gains made earlier in the week.
- This drop coincided with US inflation data that came in higher than expected.
- The February Personal Consumption Expenditures (PCE) Index revealed an uptick in inflation, contrasting sharply with January’s figures.
- While the month-on-month and year-on-year PCE readings aligned with market expectations of 0.3% and 2.5%, their core equivalents exceeded forecasts by 0.1%.
- The looming implementation of extensive US tariffs, referred to as Liberation Day on April 2, has further fueled investor anxiety across various markets.
According to CoinGlass, the crypto market saw liquidations totaling $338 million within a 24-hour period. Between March 28 and March 29, Bitcoin alone accounted for over $165 million in liquidated long positions.
Additional insights from CoinGlass reveal a notable interest from buyers within the $70,000-$80,000 range over the past six months. This suggests that Bitcoin’s price may need to dip further to capture liquidity in this area before any meaningful recovery can take place.
In the short term, analysts, including Stockmoney Lizards, suggest that Bitcoin has eliminated a significant amount of liquidity, with a local bottom expected between $82,000 and $80,000. With major short liquidation levels positioned above $88,000, speculation arises that Bitcoin may be undergoing a typical weekend correction, with a potential reversal anticipated in the coming week.
Bear Flag Pattern Suggests Bitcoin Could Drop to $62,000
From a technical analysis perspective, the price drop on March 29 aligns with a prevailing bear flag pattern.
Important Insights:
- A bear flag indicates a continuation of bearish momentum, with sellers firmly in control.
- A temporary consolidation (the flag) formed near $88,000, signaling a failed breakout attempt.
- Bitcoin has breached critical support levels, including the lower boundary of the flag at $85,800, as well as the 200-day simple moving average (SMA).
- This breakdown confirms the bear flag pattern, suggesting further losses are likely.
The measured move target from this pattern indicates a potential decline toward $62,000, representing a 25% drop from current levels. The relative strength index remains below the mid-line, reinforcing the bearish sentiment.
Michael van de Poppe, founder of MN Capital, believes that Bitcoin is likely to experience additional downward momentum as the trend continues to show lower highs and lower lows. He suggests that the price could retest the lows around $76,600 before any upward movement occurs.
According to macroeconomic market analyst Capital Flows, Bitcoin could correct to the $72,000-$75,000 range if liquidity conditions remain stable. Meanwhile, veteran trader Peter Brandt predicts that Bitcoin may be on a trajectory toward $65,635 after confirming a bear wedge pattern.
