A sell-off in the crypto market that started on Monday this week intensified overnight, with bitcoin (BTC) dipping as low as 55,600 before a slight recovery started during early European trading hours.
At 11:20 UTC, bitcoin traded at USD 56,777, down 5.8% for the past 24 hours and down 12.6% for the past 7 days.
At the same time, ethereum (ETH) was down 3% for the past 24 hours and 12.6% for the week, trading at USD 4,129. The current price means that the second-most valuable cryptoasset has also trimmed losses from earlier, after dipping below the key USD 4,000 level several times overnight UTC time.
As usual, the overnight sell-off triggered large liquidations of long positions in the crypto derivatives markets. According to data from Coinglass.com, the past 12 hours saw USD 196m in liquidations across all coins and exchanges, while bitcoin alone saw liquidations of USD 112m over the same period.
Commenting on the current state of the bitcoin market from a technical analysis perspective, Ki Young Ju, CEO of the crypto analysis website CryptoQuant, identified several key support levels where he said the price is “likely to bounce at.”
Based on the support levels identified by the analyst, the USD 55,000 level would be the next level to watch to the downside, with the price currently hovering around the USD 57,000 support area.
Commenting further on the actions of some of the most important market participants – the so-called long-term holders (LTHs) of bitcoin – on-chain analytics firm Glassnode wrote on Twitter today that these key players “do not appear to be spending their coins in panic.”
Analysts at the firm added that the long-term holders are sitting still, despite a near 20% correction from the all-time high price, and that “the vast majority” of the LTHs remain in profit.
Others also painted an optimistic picture based on more traditional charting techniques, with the popular Twitter user The Crypto Dog arguing that the price drop could simply be a retest of a longer-term trend line in the bitcoin chart.
However, not everyone was equally optimistic about the bitcoin price – at least not over the short-term.
According to crypto trading educator and Crypto-TA.nl founder Crypto Ed, bitcoin fell “way lower” than expected. The popular Twitter user added that he expects “at least” one more leg down before the sell-off is over.
Meanwhile, some observers also tied the current sell-off the upcoming distribution of bitcoins held by the Mt. Gox trustee in Japan.
Commenting to Reuters today, Matthew Dibb, chief operating officer at crypto asset manager Stack Funds, said that concerns that some Mt. Gox creditors may become sellers following the release of bitcoins from the trustee “has brought some fear” to the market.
However, industry insiders that Cryptonews.com spoke with earlier did not share the concern.
According to Julian Liniger, co-founder and CEO of the Switzerland-based BTC broker Relai, the majority of Mt. Gox’s creditors are early bitcoin adopters that could be considered “long-term believers and hodlers.” As such, many of these people will not sell any coins at all, Liniger argued.
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