In a broad-based drop from recent record highs, cryptocurrencies slumped on Tuesday, with Bitcoin momentarily falling below $60,000 and Ether at its lowest level this month. Traders were caught off guard by the largest digital coin, which dropped as much as 8.2% before halving its losses. The dip to $58,661 was the most significant intraday decrease since September 24.
Bitcoin Price Free Fall
From well above the $65,000 level, Bitcoin’s price began a new downward trend. BTC has entered a negative zone after trading below the important $65,000 support level.
The $62,000 support level and the 100 hourly simple moving average were both broken. Finally, the price fell below the main support zone of $60,000. Near $58,630, a low has formed, and the price is now consolidating losses.
On the upside, near the $60,000 mark, there is immediate opposition. The $60,450 level is the first big obstacle. It’s around the 23.6 percent Fib retracement level of the significant slide from the swing high of $66,350 to the low of $58,630.
On the hourly chart of the BTC/USD pair, a key negative trend line is forming with resistance near $61,000. A decisive break above the $61,000 resistance level might signal the start of a steady rebound. The next significant resistance level is at $62,500.
What On Chain metrics and technicals say?
Daniel Joe, a well-known Bitcoin on-chain specialist, is unconcerned, blaming the current drop on a variety of factors.
We need to watch where the BTC price will close, he said. The 50-day moving average was tested, but buyers jumped in aggressively, and the rebound is still bouncing.
This retracement can be seen as an intraweek drop below $64.8K, the previous all-time high. However, for the weekly close, it is critical that the price pushes back above this level.
Joe observes that there was no aggressive distribution from long-term holders today from an on-chain standpoint. Miners are likewise not actively selling this pullback.
However, the analyst remains optimistic for the medium and long term and sees this as a good time to invest.
The analyst also mentioned the liquidation of leveraged long positions, the rising dollar, elevated overall leverage, stocks hitting important technical targets, overbought conditions, and the dread of Mt. Gox distribution as some of the causes for the current decline.