(Kitco News) - The cryptocurrency market took a turn for the worst on Friday morning as a wave of selling pressure sparked across-the-board declines in the top 100 coins, with many tokens registering double-digit losses as traders fled to the sidelines.
Data from TradingView shows that Bitcoin (BTC) broke below support at $23,000 in early trading, quickly sliding to a low of $21,290 before reinforcements arrived to put a halt to the sell-off. This marks a daily decline of 9.3% for BTC.
BTC/USD 1-day chart. Source: TradingView
The top cryptocurrency now finds itself trading at the bottom of the range it's been stuck in for the past month, threatening to fall back to support at $20,000 if the situation continues to deteriorate.
Ether (ETH) price has suffered a similar fate, falling 10% from its Thursday high and now testing the fortitude of bullish support at $1,700.
ETH/USD 1-day chart. Source: TradingView
The move lower for ETH comes despite the building hype surrounding the network's upcoming transition to proof-of-stake, known as the Merge, which is predicted to occur on September 15.
Widespread liquidations
Friday’s move lower appears to have caught bullish futures traders off guard, with data from Coinglass showing that a total of $462.65 million worth of longs were liquidated in the sell-off, along with $68.8 million worth of shorts.
Total liquidations. Source: Coinglass
As shown on the chart above, Friday’s drawdown resulted in the highest level of liquidations since the Three Arrows Capital-inspired plunge in prices that occurred near the middle of June.
Breaking it down by asset, Bitcoin traders lost over $203 million while Ether traders at $140 million as a result of Friday’s downturn.
Bears are now in control
The widespread pullback in the crypto market has put bears back into the driver’s seat, according to Kitco technical analyst Jim Wyckoff, who noted that “Bitcoin-U.S. dollar prices are solidly down and hit a three-week low” in his morning Bitcoin brief.
“Bears have gained the near-term technical advantage as a two-month-old price uptrend on the daily bar chart has been negated. Now, the path of least resistance for Bitcoin prices is sideways-to-lower in the near term,” Wyckoff said.
As for what levels to keep an eye on moving forward, the spotlight has once again returned to Bitcoin’s 200-week moving average, which has historically been a reliable bear market indicator.
If #BTC indeed confirms a breakdown from the 200-week MA...
— Rekt Capital (@rektcapital) August 19, 2022
Then it is possible that a relief bounce into the 200-week MA to flip it into new resistance could take place
The 200-week MA represents the price point of ~$23200$BTC #Crypto #Bitcoin pic.twitter.com/mZ7jYP9f1L
Traders flee to stablecoins
Insight into the current state of things can be found in the following heatmap, which shows that the majority of coins currently in the green for the day are stablecoins, which is never a sight that crypto traders want to see.
Daily cryptocurrency market performance. Source: Coin360
Some of the hardest hit tokens include an 18.5% decline for Synthetix (SNX), a 17.28% pullback for Filcoin (FIL) and a 17.11% dip for STEPN (GMT).
The overall cryptocurrency market cap now stands at $1.034 trillion, and Bitcoin’s dominance rate is 39.6%.
