Bitcoin May Face A Bottom Of $28,000 As The BTC Sell-Off Takes An Unexpected Turn

Bitcoin is still struggling from market instability, with BTC values down more than 10% this week.

Bitcoin fell drastically yesterday, bottoming out around $35,700 before closing at roughly $36,500, despite soaring close to $40,000 on Wednesday as less hawkish attitudes were relieved by the Fed’s rate hike. BTC is still trading in around the same closing price range today, with the entire crypto market undergoing a shakeout.

According to Coinglass, the total value of liquidations in the last 36 hours has surpassed $427 million, with Bitcoin, Ethereum, STEPN (GMT), and APE leading the way with $200 million, $69.18 million, $12.42 million, and $12.24 million in their respective tokens wiped out. Overall, 111,762 traders were liquidated.

The crypto sell-off has been linked to a huge wave of risk aversion that rattled the US stock market, with stocks falling significantly and investors facing one of their worst days since 2020. 

The crypto sell-off has been linked to a huge wave of risk aversion that rattled the US stock market, with stocks falling significantly and investors facing one of their worst days since 2020.  The Nasdaq-100 index, which is heavily crypto linked, fell almost 5% to $12,317.69 on Thursday afternoon. This decline was mirrored in key tech firms such as Meta, Amazon, and Apple, which all fell by more than 5%.

The Dow Jones Industrial Average dropped over 3.3% to $32,690, while the S&P 500 lost just over 3.6% to $4,103, marking its second-worst single day of the year.

The Fed raised its interest rate by 50 basis points on Wednesday, as expected, with Fed Chair considering a more aggressive strategy to decreasing the Fed’s balance sheet.

Interest rate hikes typically exert downward pressure on growth stocks by making long-term earnings less appealing to investors.

Despite Bitcoin‘s on-chain accumulation disregarding the Fed’s tightening portent, Thursday’s sell-off appears to have worsened the cryptocurrency’s technical profile, with renowned analyst Peter Brandt predicting a drop to $28,000.

Bitcoin plummeted below the $37,500 support just hours after it failed to break and close above the $40,000 psychological threshold on Wednesday.

However, given the current level of market volatility, there is no certainty that pricing will behave in that manner.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

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