The digital asset, which has been on a bullish trend since the start of the year, was met with heavy selling pressure on crypto exchange Binance, where large sell orders were clustered at higher price levels.
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According to the order book data from Binance, there were over 800 bitcoins, worth about $55 million, waiting to be sold at $69,000 and $70,000. These sell orders posed a significant resistance to Bitcoin’s price, sending it lower. After briefly touching $69,208 at 15:04 UTC, bitcoin plunged more than $1,000 in a minute and then dropped to as low as $61,700, according to CoinDesk Bitcoin Index (XBX) data.
The sell-off erased some of the gains that Bitcoin had made in the past week when it surged over 20% and broke multiple resistance levels. The rally was driven by several positive factors, such as the launch of the first bitcoin exchange-traded fund (ETF) in the U.S., the adoption of bitcoin as legal tender by El Salvador, and the growing institutional and retail interest in the crypto space.
However, some analysts warned that bitcoin’s price was due for a pullback after reaching overbought levels, as indicated by technical indicators such as the relative strength index (RSI). They also pointed out that the market sentiment was too optimistic, as reflected by the high funding rates on perpetual futures contracts, which imply that traders are betting on further price increases.
Despite the price dip, some experts remain bullish on bitcoin’s long-term prospects, as they believe that the fundamentals and the demand for the cryptocurrency are still strong and growing. They also expect that bitcoin will recover from the correction and resume its uptrend, as it has done many times in the past.
One of the factors that could boost bitcoin’s price in the future is the upcoming halving event, which is expected to occur in 2024. The halving is a process that reduces the reward for mining new bitcoins by 50% every four years, making the supply of bitcoins more scarce and valuable. The next halving will reduce the reward from 6.25 bitcoins to 3.125 bitcoins per block.
The halving is seen as a bullish event for bitcoin, as it creates a supply shock and increases the demand for the cryptocurrency. Historically, bitcoin has experienced significant price increases in the months leading up to and following the halving. For instance, in 2016, bitcoin’s price rose from $430 to $760 before the halving, and then soared to $20,000 in 2017 after the halving. Similarly, in 2020, bitcoin’s price increased from $7,000 to $9,000 before the halving, and then skyrocketed to $66,000 in 2021 after the halving.
Therefore, some analysts predict that bitcoin could reach new highs in the next few years, as the halving effect kicks in and the demand for the cryptocurrency outstrips the supply. Some of the bullish predictions include $100,000, $500,000, and even $1 million per bitcoin.
Bitcoin’s price movement in the past week has shown the volatility and unpredictability of the crypto market, as well as the potential and challenges of the industry. Bitcoin has demonstrated its resilience and strength as the leading cryptocurrency, breaking new records and attracting more attention and adoption. However, bitcoin has also faced some hurdles and uncertainties, such as regulatory scrutiny, environmental concerns, technical issues, and market manipulation.
The future of bitcoin and the crypto market will depend on how these factors evolve and interact, and how the industry adapts and innovates to overcome the obstacles and seize the opportunities. Bitcoin has proven to be a revolutionary and disruptive technology that has changed the way we think about money and finance, and has inspired the creation and growth of thousands of other cryptocurrencies and blockchain projects. Bitcoin has also shown to be a volatile and risky asset that requires careful and informed decision-making, and a long-term and diversified investment strategy.
Source:
Bitcoin (BTC) Price Rise Beyond $69K Is Capped by Large Sell Orders on Binance (coindesk.com)