The crypto market is experiencing a jolt in terms of prices as Bitcoin and other cryptocurrencies plummet. CoinMarketCap shows that Bitcoin price has retreated below the $23,000 level, losing nearly 4% of its value in the last 24 hours, at the time of writing. This may have been caused by recently released macroeconomic data that shows a slowing economy.
Source: CoinMarketCap
Just this Thursday, February 23, quarter on quarter GDP growth has decreased from 3.2% to 2.7%. This is preceded by a looming house market crisis, putting pressure on investor sentiment. Equities showed little enthusiasm about the economic situation of the United States, with major indices like the Dow Jones and S&P 500 dropping a few percentages.
With equities being highly correlated with crypto, Bitcoin price, along with the entire market, might face more pain in the long term.
A Wave Of Challenges For Investors
At Bitcoin’s current price of $22,981, the downward price movement of the king crypto has pulled the altcoin market with it. According to DeFiLlama, the total value locked in the space decreased by 2% since yesterday from $49 billion to $48 billion.
Other major cryptocurrencies like Ethereum also plummeted, with the prized altcoin nearly following Bitcoin’s price drop in the weekly timeframe. This of course led to other top altcoins to experience a sudden price drop. Litecoin, a known favorite of crypto investors, experienced an 8% increase in the weekly time frame.
Source: DeFiLlama
The consequences for the recent price freefall is signigicant. CoinGlass notes that short sellers outnumber long buyers, which is then backed by a $143 million liquidation of long positions just today, February 25.
As Bitcoin Price Settles Below $23K, BTC Bulls Chart Their Next Move
The coin’s current price offers little rest for investors as the rejection at $25,000 strengthens the bears in the short to medium term. However, the bulls can find support at $22, a crucial launch pad for a near-future upward movement.
Crypto total market cap at $1 trillion on the weekend chart | Chart: TradingView.com
For now, investors and traders should focus on the coin’s support at $22k. If this support is broken, it can trigger a bigger sell-off that could put Bitcoin back at $21k.
Macroeconomic developments would also play a big role in the potential pull back in the long term. BTC bulls should also monitor major stock indices like the S&P 500 as Bitcoin price follows the equity market in price movement.
Investors should also watch investor sentiment which can be seen in the number of long or short positions in the coin. As Bitcoin price continues its downward motion, investors should brace for impact in the coming days.
-Featured image from ArborCare
