On March 25, concerns about the expiration of the record-breaking $ 6.1 billion (BTC) options that Friday sparked an overnight sell-off that brought Bitcoin price down to $ 50,400.
The downturn came as no surprise to many traders, with some calling for a possible test of the USD 47,000 support level. Despite Bitcoin’s loss of bullish momentum, several derivative indicators, including a bullish futures premium and a neutral bias, suggest that the price may not drop below $ 50,000.
While technical indicators paint a mixed picture of Bitcoin’s near-term price action, the asset maintains strong fundamentals today. Media reported that sovereign wealth funds have started inquiring about positions in BTC. This indicates increasing global adoption of BTC and the cryptocurrency sector as a whole, as new Ether (ETH) trusts are also being set up to serve institutional investors.
Analysts believe the market is oversold
Glassnode Co-Founder and CTO Rafael Schultze-Kraft recently highlighted a potential decline based on a low realized price spread of between $ 51,100 and $ 54,000.
Not much #Bitcoin was realized between here and $ 51,000. Wouldn’t be surprised if we got a little more immersed.
Strongest support in the chain currently at $ 47,400. Http://t.co/3GFPTQPp6F pic.twitter.com/NLBQvEIGfB
– Rafael Schultze-Kraft (@ n3ocortex), March 22, 2021
In a follow-up tweet after the decline on Thursday, Schultze-Kraft reiterated that the decline was “not unexpected” and that he believes the overall outlook remains optimistic.
“Structurally nothing has changed. I haven’t seen a data point that is bearish over the long term. “
Further indications of a possible short-term trend reversal can be found in the change in Bitcoin’s liquidity supply, which has decreased by the largest amount for more than 6 months.
This suggests that a large number of BTC has been pulled from the circulating supply and deposited in longer-term warehouse letters as the bulls prepare for the price to trend higher.
Altcoins are sinking lower
Much of the altcoins were hit hard by the Bitcoin sell-off as traders across the market left their positions to hold onto their recent gains.
The only highlight among the altcoins is Aragon (ANT), whose recent DeFi and non-fungible token trend helped spark a 50% rally to $ 13.56.
Holochain (HOT) and Balancer (BAL) were also able to achieve a positive plus of 5.2% and 6.4%, respectively.
The market cap for cryptocurrencies is now $ 1.62 trillion, and the dominance rate of Bitcoin is 59.4%.
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