Bitcoin crashed below $100K, a psychological support level, with macroeconomic factors and outflow of ETFs contributing to this major impact. The market hemorrhaged around $1 billion during the past 24 hours as the traders were overwhelmed with fear.
Bitcoin crashed below $100K and reached $99.9K for the first time after three months. As shown in the chart above, the flagship crypto has already slipped out of the bounds of the bullish falling wedge and is trying to recover at $101K. Although many expected BTC to be back within the bounds of the falling wedge, however, it disappointed many investors.
$1.78 billion was liquidated in the past 24 hours
According to Coinglass $1.78 billion was liquidated within the past 24 hours. And within this amount, $1.37 billion was liquidated in long positions. This means that long position holders who bet that the market will gain value had their orders forcibly liquidated. When comparing the long positions liquidated against the short positions wiped out, more than 76% of the liquidations were in long positions, while only about 23% were in short positions, showing that the traders were expecting a price hike.
Fear grapples market
With such a massive wipeout, the crypto market is perplexed, and fear has taken over. The Fear and Greed Index, which gauges the overall market sentiment, has crashed to 20 on its scale, as it is edging closer to the extreme fear zone.
Crypto ETFs bleed profusely
Funds started leaving the crypto ETFs last Wednesday. With about $675 million leaving crypto ETFs yesterday, this will be the fifth consecutive day that the market has bled. Bitcoin ETFs saw around $566 million pulled out, while only about $108 million was moved out of ETH ETFs.
So let’s put it together. Fear has taken over the crypto market while its prices and crypto ETFs are bleeding, but the U.S. dollar is strengthening against the euro. So what does this mean? This shows that the investors are in a risk-off mode, moving away from volatile assets. The crypto market sell-off, which coincides with a strengthening U.S. dollar, suggests investors are rotating out of risk assets and into dollar-denominated safe havens.
According to a crypto netizen, Bitcoin will pump up once the government shutdown ends, given that BTC follows the 2019 playbook. So, until the government remains shut, the flagship crypto might continue to fall. BTC might be looking to land on $99.6K as support.
While Bitcoin finds its support level and crypto finds its footing, investors will start finding alternatives to put their funds into. One major commodity that will allure investors will be gold. After hitting new all-time highs, the commodity is currently selling at $3.9K – a good entry point.
Given the uncertainties like the trade war and the Fed’s interest rates, which could have a big impact on the already volatile crypto market, gold and the U.S. dollar would be a better option.
