(Kitco News) – Bitcoin’s bad week got even worse on Friday as the top cryptocurrency by market cap continues to come under pressure, dragging the digital assets ecosystem lower with it.
King Crypto managed to hold above the 57k level for much of the trading day Thursday, but after failing to break above $57,400 multiple times during overnight trading, BTC finally broke definitively downward shortly before 11:00 pm EDT, falling from $56,792.80 to just below $56,000 in only 10 minutes.
The next hour saw Bitcoin grind to the low 55k level, and shortly after midnight, it saw its next sharp decline, taking the price to $53,802.52 in another 10 minutes. After setting the session low of $53,785.92 on the 24-hour chart at exactly 1:00 am EDT, Bitcoin traded sideways in the high 53k’s until around 5:00 am, where it began its slow climb up from the lows, though it still hasn't managed to pierce the $56,000 level again.
At the time of writing, Bitcoin trades at $55,636.17 for a loss of 2.45% on the daily chart.
How low can we go?
Digital assets traders and experts were looking to the charts on Friday morning for clues as to where the floor may be for King Crypto.
“BIGGEST liquidation event since the FTX collapse,” wrote crypto investor Quinten Francois, who shared a multi-year chart showing the magnitude of the downward move.
“The downside accelerates to lower prices,” wrote analyst Rekt Capital in an X post. “But the downtrend is also declining, representing lower and lower prices.”
“At some point in the future, Bitcoin will test this Downtrend for a breakout attempt,” they added. “Still the trendline to watch going forward.”
“Capitulation event,” wrote trader Doctor Profit. “Market makers have decided to take action in response to the ongoing Mt. Gox and German selling news. People have started selling, and panic is rising.”
“The box has been technically invalidated on the chart after lasting a year and providing great opportunities during this sideways period,” he wrote, referring to a chart from an earlier post.
“I understand the panic, as #BTC is down 25% from its peak, but as someone who has been here for many years, I can tell you that the FUD we are witnessing right now is special,” Doctor Profit said. “Special because of numbers, the amount of selling pressure is huge, and we need to know the source for this selling.”
He added that while the source of selling is clear, the “selling pressure is 100% artificial and mixed with the fear of retails. The same type of capitulation event happened back then when Bitcoin moved sideways in a box for five months before breaking down, marking the ultimate capitulation event.”
“I compare today's capitulation event to the one in 2022 when Bitcoin was at $18,000, moving sideways for five months before dropping 15% to $16,000, marking a new phase of market depression,” he said. “I see the same pattern of market makers using the same psychological patterns here. I would even say that the market makers from the 2022 box formation and capitulation event are the same market makers involved in the current box and capitulation event."
"For me, these events are nothing more than great opportunities to accumulate more," he said. "The same people back then that caused fear and panic and mass liquidations are leaving their finger prints in the chart. Its the same strategy, the same MM that sent us to a new ATH afterwards and you know exactly what happened.”
“Most people are losing hope right now, which is exactly what market makers want to see and cause,” Doctor Profit said. “I wish you good luck with your shorts. I have been holding my spot positions since $16,000 and will keep adding ON each dip, just like now. Never judge based on wicks, capitulation events, and mass liquidations. These are always the beginning of a new reversal!”
“It's nothing but a capitulation,” he added. “The local bottom is in this area. The box area and prediction were accurate for an entire year, providing great entry points. Even today, buying below the box is a gift. Q3 started bloody but will end with massive green candles!”
"Longs are triggered & not selling the spot,” Doctor Profit concluded. “It's your turn to decide.”
Others were looking past the losses at the expected bounce, which the paper hands would miss out on as they sold into the slide.
$BTC
Type of move that front runs the normie bid zone then cuts through it all at once later.
They don't get to enjoy this current bounce and when they finally get filled, their stop below "support" gets tagged as price pushes to mid 40K's.
It's a cruel world. pic.twitter.com/n7fAMwHJk9— Crypto Chase (@Crypto_Chase) July 5, 2024
