The recent Bitcoin price crash below $66,000 has sent shockwaves through the cryptocurrency market, resulting in over $90 million in liquidations within a 24-hour period. Despite the significant drop in price, analysts are warning that the worst may not be over yet. Crypto analyst Ali Martinez has expressed concerns that Bitcoin could potentially see another 20% decline from its current levels.
In a recent analysis posted on X (formerly Twitter), Martinez painted a bearish picture for the pioneer cryptocurrency. The Bitcoin crash below $68,000 not only breached a key support level but also brought the price below the important $67,890 pricing range. Martinez highlighted the significance of this level as the “+0.5σ MVRV pricing band,” indicating that a drop below this threshold could signal further bearish momentum. As Bitcoin has already fallen below this critical level, Martinez believes that a correction may be imminent, with a potential target of $54,930 for the price.
Should Bitcoin continue its downward trajectory and reach the projected target of $54,930, it would represent an additional 20% decline from its current price. Such a sharp drop in Bitcoin’s price could have dire consequences for altcoins, which often follow the trend set by the leading cryptocurrency. In the event that Bitcoin falls below $55,000, altcoins could see their prices plummet by as much as 50%.
One notable development accompanying the Bitcoin price crash is the significant drop in trading volume. According to CoinMarketCap, the daily trading volume for Bitcoin has decreased by 43.5% within the last day alone. This decline brings the daily trading volume to approximately $19 billion, down from the nearly $40 billion recorded the previous day. The decreased trading volume suggests that investors are becoming more cautious, perhaps opting to wait for a more stable market environment before entering new positions.
Fear & Greed Index
The Crypto Fear & Greed Index has also declined in response to the recent market turmoil, indicating a growing sense of fear among investors. The index currently stands at a score of 60, signaling greed, albeit to a lesser extent than the extreme greed observed in May when the score reached 76. The shift in investor sentiment from greed to fear reflects the prevailing uncertainty in the market.
At the time of writing, the Bitcoin price is holding at $65,667, with a modest gain of 0.77% in the last day. However, the looming possibility of further price declines and the overall bearish sentiment in the market are keeping investors on edge. As the cryptocurrency market continues to navigate through this period of volatility, it remains to be seen how Bitcoin and other digital assets will fare in the coming days.