The post Why Bitcoin is Going Down and How Low It Can Go? appeared first on Coinpedia Fintech News
Bitcoin is showing signs of rising bearishness amidst high greed in the market. The overall crypto market cap has dropped by 5.44% reaching $3.43 trillion in the last 24 hours. Historical level of liquidations was witnessed specifically in the last 12 hours. But why is this happening when everyone is so positive about the market and how far Bitcoin can fall? Are you wondering why bitcoin is going down today? Let’s analyse what is happening with the market.
High Greed Brings High Risk
If you have been in the crypto space for a while and have seen at least one crypto cycle you would have seen such things happening before. When the market goes into a sentiment of high greed for many days and people get comfortable with the bull market, it retraces. It is always traders vs. the market and who has more power? Obviously the market. The seasoned professionals always suggest people to be scared when the market is greedy. Such times are the perfect time for the market to take money from traders.
Technical Side of Bitcoin
After facing rejection from the new ATH, Bitcoin had taken a downturn of about 13.60%. Though it did not close there and it came out only to be a shadow. The asset held itself and tried to rise again however failed to do so. BTC kept on riding the Moving average 20 for quite some time before falling below it on December 9 which triggered a panic in the market. Following this, Bitcoin fell under the Moving average 50 and then 100. This is enough shock for the market.
BTC is currently trading at $96,607, a 2.90% drop in the last 24 hours. The trading volume pumped by 118% as traders started shorting the asset. How down can it go? Well that would be very difficult to say however, the nearest strong zone lies at $92,600 and moving average 200 is also holding this spot, making it more strong.
The RSI levels are falling sharp. It is currently at 38.08 which is not good for bulls but definitely a comfortable time for short traders. The average direction index at 16.44 also shows bears are holding the market.
Other Metrics
According to the liquidation data by Coinglass, a total of $1.75 billion worth of liquidations happened in the last 24 hours. Most of these liquidations are the long traders as the market changed its position following bitcoin’s downward movement. Over half a million traders lost their funds to these liquidations.
The whale orders and large trade data from coinglass shows that even though the market shows greed, in reality the long traders are in fear. There are few to none long orders around this price range and whales are shorting BTC. The good amount of longs lie between $92k and $94k. Does this mean the crypto can fall more? Yes, it might, if the market fails to get more strong buys.
What to expect?
The downturn during a bull market brings in desperate times. The Greed and Fear index shows high greed, the indicators showing an upcoming down movement, makes it all confusing. Be aware that the market tends to move in the opposite direction of a high saturation of emotion. As more and more people will short the asset, Bitcoin will start rising again suddenly. If you are thinking of entering the market to take trades, high precaution is advised in order to save your funds. The high greed sentiment in the market is the reason why bitcoin is going down.
