Bitcoin (BTC) price fell below $40,000 for the first time in over three months, hitting an intraday low of around $36,000 at 7:30 am ET. The coin has dipped for the fifth day in a row, down 21.9% within the last 24 hours bringing its losses this month to over 35%, the most for a single month since November 2018. Bitcoin has now lost almost 44% of its value since its record-breaking high of $64,829 in mid-April, erasing all gains after Tesla announced that it would purchase $1.5 billion worth of the cryptocurrency. The liquidation in the market is gaining momentum.
The full-blown market pullback has seen over $3.8 billion worth of cryptocurrencies liquidation due to margin calls, $1.69 billion in the last hour alone as the major sell-off which saw over $250 million evaporate from the Bitcoin market last week continues. The crypto market has now seen over 470,000 traders liquidated, 20% of Open Interest wiped, and a 500% increase in liquidation volume.
Out of the over $3.8 billion worth of cryptocurrencies liquidated, $2.1 billion came from Bitcoin trades, $1.01 billion from Ethereum trades with $115.4 million coming from XRP trades. Dogecoin which has been a sensation this year has also seen $71 million worth of Doge liquidated whiles layer-2 network Polygon (MATIC) took a $40 million hit.
Total liquidation in the market the past 24 hours is however still a small part of the record $10 billion worth of forced closures recorded on April 17, when Bitcoin fell from $60,000 to $52,000. Bitcoin on Monday fell below its 200-day SMA (around $39,825) which was a key level of support as the last time Bitcoin fell below that was back in April 29, 2020. The biggest cryptocurrency however slightly recovered in the early hours of today, topping the $40,000 mark with a $1,500 increase in value from the $38,500 trading level at the latter stages of Tuesday.
Bitcoin has since fallen deeper down the slope as news of China banning all crypto-related services among its citizens broke. Even though reports suggest that the new laws and development was not from an official government source, the damage seems to be in motion as the price of the largest cryptocurrency continues to fall. Bitcoin at press time was trading at $35,064 and now needs to climb up to the next resistant level which sits at the $39,800 price level should it have any chance of an upward trend within the next few days.
Although Bitcoin’s current state is nothing more than mediocre, some market experts believe that the digital coin has what it takes to turn things around. Ulrik Lykke, executive director at crypto hedge fund ARK36, speaking on Bitcoin stated that “in terms of Bitcoin’s outlook, things may be looking grim right now, but historically this is just yet another hurdle for Bitcoin to overcome and a small one compared to what it has braved in the past. ”