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Bitcoin price hit a new all-time high of $73,835 on March 5, but overheated conditions coupled with profit-booking resulted in a retrace. BTC then retraced sharply, losing more than 9% of its value to set a swing low of $66,729 on March 15.
Bitcoin has since recovered from this low and now trades at $68,315, down 6.7% over the last 24 hours.
The flash crash has wiped out more than $680 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 $73,000 off guard, with over $242 million 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 $9.57 billion since their debut on Jan. 11 and now have cumulative assets under management of $61.51 billion.
BlackRock, the world's largest asset manager, now holds over $12 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 half, is also expected to propel BTC upward. What BTC is undergoing is a phenomenon analysts have referred to as the pre-halving retrace.
After the halving, traders expect Bitcoin to undergo a period of sideways price movement before going into a parabolic uptrend to new all-time highs.
The halving, which is approximately 34 days away, will reduce miner block rewards from 6.25 BTC to 3.125 BTC. This 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 appeared to be 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 9% dip as a healthy correction.
Therefore, increased buying from the current levels would see the BTC price rise to $70,000 before retesting the new all-time high above $73,800. Breaking this level would bolster the big crypto into price discovery, with the psychological level at $80,000 and the -27.2% retracement level at $83,400 being the key levels to watch in the short-term.
Bitcoin's upside was supported by the directional movement index (DMI). The positive directional line (+D1) value at 26 was way above the negative directional line (-D1) at 13. The value of the average directional line (ADX) at 55 suggested that BTC's uptrend was very strong.
The key levels to watch on the downside are the 23.6% Fibonacci retracement level at $65,496 and the $62,000 psychological level. Additional lines of support could emerge from the 50% extension level at $56,168 and later the 20-day exponential moving average at $55,000.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
