Bitcoin’s deepest sell-off since crypto mania began earlier this year appears to be intensifying as the downturn in the cryptocurrency market shows no signs of subsiding due to an increase in risk aversion and a new risk constellation.
The world’s largest cryptocurrency has fallen nearly 10% to just under $ 32,000, its lowest level in nearly two weeks.
The entire cryptocurrency market has moved almost in step with Bitcoin in the last few days and also seems to be in depth.
Given the massive sell-off volumes, it appears that many traders and investors are making profits now before a potential sell-off, a repeat of what happened in April.
At the time of going to press, Bitcoin (BTC) in the top 10 big caps changes hands at $ 32,480, Ether (ETH) at $ 2,020, Ripple (XRP) at $ 0.7, Binance Coin (BNB) $ 315, Cardano (ADA) for $ 1.32, Dogecoin (DOGE) for $ 0.25, ChainLink (Link) for $ 19, UniSwap (UNI) for $ 18, Polkadot (DOT) for $ 18 and Stellar (XML) for $ 0.26.
It is important that, in contrast to the previous weeks, there are no significant dip buying, as the fear of further declines against the background of the persistently negative outlook continues to fuel caution and the general willingness to take risks in the market.
This could open new lows and push Bitcoin below the $ 30,000 mark for the first time in months. Altcoins would suffer similar percentage declines as before.
To make matters worse, almost all margin providers are announcing temporary margin changes on cryptocurrency instruments due to increasing short selling, as experienced traders use leverage to anticipate such pullbacks.
It is not uncommon for brokers and stock exchanges to warn customers of tightened margin rules when they prepare for “increased volatility” in the markets.
Additionally, at current levels, Bitcoin is breaking below the simple 50-day moving average, an important barometer for buyers and sellers who rely on technical charts to calculate their next moves. This pattern is also known as the “death cross” among technical chartists.
It seems that the main news lately has been media reports that China is stepping up its crackdown on cryptocurrency mining. Authorities in southwest Sichuan Province ordered the closure of cryptocurrency mining projects on Friday.
Bitcoin mining in China accounts for more than half of the world’s bitcoin production.
The upward traction is largely limited by very limited buying, which suggests that further market-wide losses in the coming days should not be ruled out.
Right now there is concern that the current downtrend may only be a glimpse of what has to come when risk averse corporate investors make bank profits and jump off the sinking ship and retailers hold their pockets.