Bitcoin Price Potentially Rebounds After $393 Million Liquidation
Bitcoin experienced a significant decline to $91,170, driven by market volatility and external economic pressures. Despite a $393 million liquidation spike, possibilities for recovery arise from historical trends, seasonal patterns, and upcoming negotiations under Trump. Technical analysis suggests a potential bullish breakout targeting the year-to-date high of $109,200.
Bitcoin experienced a sharp decline in price, hitting a low of $91,170 on Monday. This downturn coincided with significant sell-offs in both the cryptocurrency and stock markets, largely influenced by worries regarding stagflation in the United States. The decline represents a drop of over 16% from Bitcoin’s peak this year, primarily attributed to new tariffs instituted by Donald Trump that could further increase inflation and affect consumer spending patterns.
As a result of the price crash, there was a notable spike in liquidations, with leveraged long positions being closed, leading to nearly $400 million in liquidations reported by CoinGlass. This is the highest level seen in weeks, indicating widespread panic among investors. Although the market faces turbulent times, there are signs suggesting that Bitcoin may soon experience a rebound.
There are three key indicators that suggest a potential recovery for Bitcoin following Monday’s significant downturn. First, when Bitcoin has faced declines on Mondays in prior instances, it has often performed positively as the week progresses. Second, historical seasonality trends point to February as a favorable month for Bitcoin, with an average return of approximately 14% since 2013. Third, the upcoming trade negotiations led by President Trump might boost market sentiment, impacting both cryptocurrency and stock prices positively.
Analyzing the daily chart indicates that Bitcoin has recently stabilized, forming a bullish flag pattern after its recent decline. The price remains above critical moving averages, including the 50-day and 100-day Exponential Moving Averages. With this technical setup, a bullish breakout may occur later this month, with initial targets aiming for the year-to-date high of $109,200.
The cryptocurrency market, particularly Bitcoin, is susceptible to various economic factors and investor behavior. Recent geopolitical decisions, such as tariffs introduced by the Trump administration, have had a considerable impact on inflation and overall market sentiment. Understanding the intrinsic properties of Bitcoin’s trading patterns, liquidations, and seasonal performance can provide insights into its future movements as investors react to prevailing economic conditions.
In summary, despite the recent drop in Bitcoin prices attributed to external economic pressures and high levels of liquidation, indications suggest a potential rebound. Historical trends, seasonality, and upcoming negotiations signaling potential market changes may contribute to a favorable recovery. Investors should closely monitor these factors, as they may significantly affect Bitcoin’s trajectory in the near term.
Original Source: crypto.news
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