The Bank of Japan’s rate hikes led to a global market sell-off by affecting the profits of carry-forward traders. With the increased rates of overborrowing, investors closed their existing positions in risky instruments to pay off their debts. Amidst such volatility, Bitcoin and altcoins take a massive hit as the crypto market flow is highly dependent on international funds from large investors or institutions.
As Bitcoin’s downfall brings it to test below $50,000, the broader market sentiment is fearful. This is because the BTC price trend determines the crypto market movement. So, will things go back to normal, with investors anticipating Bitcoin to hit $100,000 this year? Let’s find out.
Bitcoin’s Resilience At $50,000
Following the intraday loss of 10%, Bitcoin briefly crashes below the significant level of $50,000. With the investors pulling out their funds to pay the Bank of Japan, the BTC price trend teases the support trendline breakout.
Currently, the biggest crypto trades are at $51,619 and show resilience over the $50,000 mark. While the broader market awaits a comeback, a sideways movement at the crucial support seems more likely.
Currently, the daily RSI is at 15, indicating an oversold condition in Bitcoin. Thus, it suggests a potential trend reversal, as 85% of price movement in the last 2 weeks has been bearish.
Will Bitcoin’s Downfall Bottom Out At $50K?
As Bitcoin’s price fell to $50,000, the percentage of holders in profit dropped to 75%, a level last seen in January when prices formed a local bottom around $39,000. This increases the likelihood of a new local bottom forming at the $50,000 level.
However, at the rapid rate at which the large investors are exiting, the percentage of holders in profit could further decline.
Bitcoin Futures Reveal Massive Bearish Outgrowth
At present, the Bitcoin Futures Open Interest stands at $13.5B, down by 22.99% in the last 24 hours. Further, it has declined by 35.81% in 7D, signaling closed futures positions. Meanwhile, the funding rate at -0.0077473 shows short traders as dominant, paying longs.
Conclusion
As the Fear and Greed index is edging to the left, the fundamentals remain the same. Hence, the ongoing sell-off could find a bottom soon if the US markets bounce back today.
With a next trend decision depending on the US markets opening shortly, the BTC price could experience a quick surge if DJI goes positive. On the flip side, a downfall under $50K will result in a drop to $46K or $42K.
