For the second time this month, Bitcoin price dropped below psychological support at $40,000, hitting $37,700 during today's session. Digital assets joined tech stocks sell-off as a result of which the total crypto market capitalization dropped more than 3% and is currently standing around $ 1.81 trillion. Many investors brace themselves for the upcoming rate hikes which are significantly impacting risk assets such as stocks and cryptocurrencies.
As Cointelegraph reported, Friday’s options expiry, involving the open interest of nearly $600 million, was considered the main culprit for sparking the volatility.
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Bitcoin led the liquidation pack at $250 million, followed by ether at $163 million. Source: Coinglass
The number of daily active addresses (DAA) is also moving lower. This indicator mirrors investors’ sentiment and their view on the current price of Bitcoin.
The 50-day Moving Average (MA) of DAA has crossed below the 200-day MA, which may herald further declines. The last time this occurred was on May 17 after which BTC price plunged from roughly $46,000 to $29,000. Source: Santiment
The short-term perspective looks bleak, especially that interest from institutional investors is declining. As long as this trend does not reverse, the downward movement may deepen.
Digital asset investment products saw outflows totalling US$73m, the 5th week of outflows with this run now totalling US$532m. Source: Coinshares
Bitcoin fell over 8% on Friday. Overnight bout of volatility sent the largest cryptocurrency to six-month lows around $37700. If current sentiment prevails and sellers will manage to break below support at $37200,(which coincides with 78.6% Fibonacci retrenchment of the upward wave launched in June 2021), downward move may accelerate towards next psychological support at $30000. Source: xStation5
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