In the past three hours, the crypto market is facing another devastating crash and a 7.67% drop that has eroded over $150 billion in investors’ assets.
The world’s largest cryptocurrency Bitcoin (BTC) is down 8% and trading at $38,530. This is the first time since August 2021 that the price of BTC has traded below $40,000. Immediate support for Bitcoin is at $37,500. If this breaks too, we could head towards $30,000 or less. Bitcoin critic Peter Schiff write:
Bitcoin has finally broken the neckline of the head and shoulders top. The scary part in the long run is that the model predicts a move below $30,000. Once that level is broken, Bitcoin will complete a major double top. From there, a breakdown below $10,000 is most likely.
Additionally, the unrealized net loss for Bitcoin is the lowest since July 2021, as reported by Glassnode.
#Bitcoin Unrealized net profit/loss (NUPL) represents the level of $BTC holders’ unrealized profits and losses, as a percentage of Market Cap.
NUPL is currently trading at 0.43, the network’s lowest return since July 2021.
Live chart: https://t.co/QlJUY5K6eW pic.twitter.com/Zzge8fTUwZ
– glassnode (@glassnode) January 20, 2022
The Fed has begun to take some quick measures to control inflation, and the ripple effect is seen in the equity and crypto markets. Next week’s FOMC meeting could be crucial to deciding market dynamics.
Heavy Liquidity in Ethereum and Altcoins
Bitcoin competitor Ethereum is down 9% and has slipped below the critical support of $3,000. As of press time, Ethereum (ETH) is trading down 9% at $2812 and a market cap of $341 billion. Renowned crypto journalist Colin Wu write:
On the morning of January 21 (UTC+8), Ethereum fell below $3,000 and the entire network liquidation amounted to $223 million in 4 hours. Liquidation focuses on Binance OKEx FTX and Bybit.
A heavy correction ensued on the gap altcoin. Nearly all of the top ten cryptocurrencies are down 8-10%. PolygonMATIC’s also fell below $2.0 for the first time in weeks.
With the bears in full control, it is difficult to tell what the short-term forecast is. However, for longtime HODLers and players, this could be a good time to fill their pockets.