The collapse in the price of bitcoin has destroyed liquidity levels going all the way back to 2020. After the crypto industry had a high-profile liquidity issue hitting the FTX exchange, the market took a hit. As a result, the leading cryptocurrency has now corrected to a two-year low, leaving bulls looking hopeless.
The cryptocurrency market itself is in free fall, and various altcoins, including ripple, Ethereum, and Binance, are down over 15%. The price of bitcoin increased its downward trend and even traded beneath the $16,000 level of support. Price recently fell as low as $15,555 and is now extending losses. Bitcoin may keep falling if a recovery wave doesn’t form over the $16,500 level.
Technicals take a hit
At the time of writing, the price of one Bitcoin is $16,274 and the last 24 hours of the dramatic fall saw long liquidations of 679,000,000 dollars. BTC is currently trading at levels last seen in 2020, just before the epic bull run.
The Volume Profile Index indicated fewer transactions during the current sell-off than during the liquidation following the US midterm elections. This can be a subliminal signal that the slump is waning. The next targets would be 2020 liquidity levels between $15,000 and possibly $14,500 if the decline is still ongoing.
If the bulls are able to break through the $17,900 swing high, the bearish argument may become invalidated. By doing this, a surge toward $21,500 might take place. The price of Bitcoin would rise by 35% as a result of this action.
However, the technical aspects of Bitcoin are now also negative. A breakdown of the one-day technicals, in particular, indicates a “strong sell” at 16, just like moving averages do at 14. Oscillators are also supposed to “sell” somewhere at two.
