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Bitcoin price hit a new all-time high of $69,324 on March 5, but the euphoria was short-lived. BTC then retraced sharply, losing more than 14% of its value to set a swing low of $59,224.
Bitcoin has since recovered from this low and now trades at $65,984, down 2.3% over the last 24 hours.
The flash crash has wiped out more than $817 million in long positions across the crypto market, according to data from Coinglass.
Bitcoin's price volatility has caught those who set leveraged positions at $69,000 off guard, with over $309.2 billion of both long and short Bitcoin positions being liquidated.
Crypto liquidations heatmap. Source: Coinglass
Bitcoin has been rallying in 2024 following spot Bitcoin exchange-traded funds' entry into the market. The United States Securities and Exchange Commission approved the new BTC investment products on Jan. 10, setting the path for institutional capital inflows into the Bitcoin market.
Data from Coinglass shows that the BTC ETFs have seen a total trading volume of $12.94 billion since their debut on Jan. 11 and now have cumulative assets under management of $47.51 billion.
BlackRock, the world's largest asset manager, now holds over $10 billion in Bitcoin for its clients who have bought shares in its Bitcoin ETF.
Moreover, the upcoming Bitcoin halving, expected to reduce the number of BTC miner rewards by 50%, has also propelled BTC upward. The halving, which is approximately 45 days away, will contribute to Bitcoin's scarcity, and as supply is reduced, increased demand is expected to lead to further price growth.
Data from market intelligence firm Santiment shows that traders were unbothered by Bitcoin's flash crash as they saw the drawdown as an opportunity to buy more on the dip. According to the Santiment, the crash resulted in more calls to "buy the dip," meaning market participants viewed the 10% dip as a healthy correction.
Therefore, increased buying from the current levels would see the BTC price rise to $68,000 before retesting the new all-time high at $69,324. Breaking this level would bolster the big crypto into price discovery, with the psychological level at $72,000 and the 127% retracement level at $74,416 being the key levels to watch in the short-term.
Bitcoin's upside was supported by the upward-facing moving averages and the directional movement index (DMI). The positive directional line (+D1) value at 34 was way above the negative directional line (-D1) at 9. The value of the average directional line (ADX) at 52 suggested that BTC's uptrend was very strong.
The key levels to watch on the downside are the 78.6% Fibonacci retracement level at $65,225 and the $62,000 psychological level. Additional lines of support could emerge from the 50% extension level at $60,000 and later the 20-day exponential moving average at $58,000.
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