Why a Potential Bitcoin Crash Could Still Be on the Cards?
Key Insights:
- Bitcoin at a critical “Zone of Indecision” with the long-term Realized Cap impulse showing BTC testing a key level.
- Over the last four days, all altcoins dropped significantly, while Bitcoin was little affected.
- Falling below $100K could confirm the peak, but standard support could take BTC past $110,000.
A potential Bitcoin (BTC) crash could be still on the cards despite current Bitcoin’s position to make a new all time high, trading at $105,478 as of press time.
Long-Term Realized Cap Impulse on Potential Bitcoin Crash
According to the Long-Term Realized Cap Impulse chart, Bitcoin reached the so-called Zone of Indecision which could suggest the start of a key market move.
As of press time, the signal resembled events previously seen in 2020, when crossing this area also led to a 58% fall. In the years 2019 and 2022, when BTC support dropped again, it followed with swift increases.
The current signal was just above the mid-baseline, meaning the market could go either onward or reverse. If Bitcoin gets new momentum at this level, it could continue rising and follow the pattern of 2019 or 2022.
However, should Bitcoin fail to keep hold of this region, it might be similar to the 2020 campaign, putting the crypto at risk of another sharp drop.
Last year’s struggle at higher prices suggested that resistance levels might be too strong for further purchases.
Such uncertainty may keep the market in a tight range unless one group dominates.
As Bitcoin was trending higher, the signal was saying that investors should stay vigilant simply because Bitcoin not yet moving out of its critical zone.
Total Crypto Liquidations
Over the last four days, all altcoins dropped significantly, while Bitcoin was little affected which has left the traders worried.
The $264 million and $50.15 million of the $314.15 million in liquidations during the last 24 hours were long and short, respectively.
With a combined amount of $102.73 million, $12.92 million, and $11.16 million, respectively, Ethereum, Solana, and XRP were the top three liquidators.
In total, more than $16.32 million was locked out by liquidations of DOGE and PEPE.
An entire $221.5 million in losses was encountered where the majority of which came from traders in long positions, worth a total of $206.3 million.
Altcoin investors may feel encouraged to exercise caution due to high levels of selling. If pressures to sell become high, traders may decide to trade into Bitcoin, hoping this purchase could help stabilize BTC.
If virus-like spread of overselling occurs, a potential Bitcoin crash could happen, a similar price decline with altcoins.
With the current situation, taking cautious steps is advised, especially when it comes to entering the altcoin market.
At the same time, these big sell-offs could ease overborrowing, making a recovery possible when markets become more positive.
Does Price Action Suggest Bitcoin Crash?
Bitcoin started to settle down after a big rise from $82.8K with price standing in the same region where major declines occurred in February.
The usual trend after a rally in the markets, with each previous drop ranging between 13% and 21%. BTC may drop to $92K or perhaps $86K if historical trends continue.
If the price continues to rise above $104,000 and stays there, it’s possible for BTC to break the high of $108,000.
The accumulation zone by the RSI at 18.49, was well below the 30 mark. In the past, rebounds in this area led to price increases and a rebound now could indicate the market remains bullish.
The situation on Monday could determine the way prices move: falling below $100K could confirm the peak, but standard support could take prices past $110,000 and make the market bullish.
