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BTC recovers from 77k back above 80k.
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Liquidations reach $888 million & ETF sees more outflows.
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The macro backdrop hurts risk appetite.
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Mt Gox makes another major transfer.
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What could boost the market?
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Bitcoin technical analysis.
Bitcoin extended its decline to a fresh four-month low of 77K in early trade on Tuesday before dip buyers aided a recovery back above 80K. However, the mood remains fragile amid growing concerns of a US recession and as defunct crypto exchange Mt Gox moved 11,833 BTC.
Bitcoin has plunged almost 30% from its record high of 109.5k on January 20, falling over 5% this week, with altcoins following suit. Ethereum has tumbled 12% this week, while Solana trades down 10%. According to Coinglass data, the price crash has triggered $888 million in liquidations in the past 24 hours, with buyers once again being the hardest hit. $710.8 million in long positions have been liquidated compared to $177.7 million in shorts.
This latest leg lower has also pulled the crypto market cap to $2.65 trillion, over $1 trillion lower from the $3.70 trillion record reached in mid-December.
Institutional investors continue to pull capital from BTC, with Bitcoin ETFs experiencing outflows of $278.4 million at the start of the week, after $799.39 million in outflows last week. Continued BTC ETF outflows could exert further pressure on the price.
The macro backdrop hurts risk appetite
The sell-off is not confined to the crypto market. Risk assets across the board have been hammered amid rising fears that the US economy is heading for a recession. Unease around the impact of Trump’s trade tariffs means households and businesses are starting to hold off from spending, which could hurt economic growth. The Nasdaq fell 4% yesterday in its worst daily performance in over 2 years and trades well into correction territory.
Given the close alignment between US stocks and Bitcoin, particularly over the medium to long term, the crypto market may struggle to recover while the equity market experiences a correction or a more prolonged downturn.
These fears far outweigh any optimism about Trump’s announcement of a Bitcoin strategic reserve and altcoin stockpile, which turned out to be a sell-the-news event.
Market Gox makes another major transfer
Concerns over a possible distribution event could keep the market mood cautious. According to Lookonchain data, Mt Gox moved 11,833 BTC, worth over $932 million, to wallets. This follows a similar transfer last week of 12000 BTC, worth around $1 billion. Such moves often occur ahead of a sell or distribution event, which would increase supply into the market, applying bearish pressure to the price.
What could boost the market?
While dip buyers have stepped in today, it remains to be seen whether the current supports will hold in both US equities and crypto markets. Investors will want to see US economic data holding up for confidence to improve.
US inflation data tomorrow and Michigan sentiment figures on Friday will be watched closely for any signs that current fears are overdone. However, weaker-than-forecast data could fuel downturn fears and capital outflows, spurring another leg lower.
Bitcoin technical analysis
BTC trades below its falling trendline, dropping below its 200 SMA to a low of 77k. Sellers, supported by the RSI below 50, will need to close below 80k and take out 77k support to extend losses towards 72k.
Should the 80k support hold, buyers will look to rise above the 200 SMA at 83k to push on towards 90k.
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