Bitcoin Price Hits Seven-Month Low Amid Market Weakness
Bitcoin (BTC) price continues to fall, trading near $82,000 on Friday. This is its lowest level in seven months. The drop reflects growing bearish sentiment in the crypto market. Institutional demand is also weakening. Bitcoin spot ETFs saw a weekly outflow of $1.45 billion as of Thursday. This marks the fourth week in a row of withdrawals. On-chain data indicates bitcoin may still fall further before finding support.
Increased Liquidations and Falling Institutional Demand
Bitcoin has been correcting for four weeks, reaching a low near $81,600 on Friday. This is about 35% below its October high of $126,199. The price fall caused $1.82 billion in liquidations for BTC traders this week. Most of these, about $1.5 billion, were long positions, showing many traders were too optimistic.
In the last 24 hours, 402,738 traders were liquidated, totaling nearly $2 billion. Over 92% of these were long bets. The largest single liquidation was $36.78 million on Hyperliquid.
The Fear and Greed Index dropped to 14 on Friday. This signals extreme fear, similar to the lows seen in late February.
Institutional demand is also dropping. Bitcoin spot ETFs have seen $1.45 billion in net outflows this week. Thursday alone saw outflows of $903 million, the second-largest since Bitcoin ETFs launched. If this trend continues, the price may see deeper declines.
On-Chain Data Signals Continued Bearish Pressure
Glassnode’s report on Wednesday showed a clear shift in Bitcoin’s market structure. The price fell below $97,000 before dropping near $89,000. This break is below the short-term holder cost basis of around $109,500. It shows recent investors are facing losses, which often leads to panic selling.
Glassnode noted that losses now dominate most recent investor groups. The resistance range between $95,000 and $97,000 must be regained for the market to stabilize.
Investor capitulation is rising. The 7-day EMA of short-term holder losses reached $523 million daily, the highest since the FTX collapse in 2022. This indicates heavy selling pressure.
According to the analyst, strong demand is needed to absorb sellers. Otherwise, Bitcoin may face a long period of price accumulation before recovering.
Key Price Levels to Watch
- Bitcoin’s March 2024 drop was 33.57% from its all-time high.
- A similar drop today would place Bitcoin around $84,000 to $86,000.
- The average cost for Bitcoin ETF holders is about $89,651.
- Bitcoin briefly traded below this level on Tuesday and Friday.
- MicroStrategy’s cost basis is $74,433, matching Bitcoin’s April 7 low.
- This level remains a key psychological target for traders.
Technical Indicators Point to More Downside Risk
Bitcoin’s weekly chart shows a 34% drop from its all-time high. The price is now below the 100-week EMA near $85,389. If it closes the week below this level, support could drop to $71,769.
The weekly RSI reads 33, signaling growing bearish momentum. The MACD indicator shows a bearish trend with expanding red histogram bars.
On the daily chart, Bitcoin fell below the 78.6% Fibonacci retracement level at $85,569. The price hovered around $82,000 on Friday.
Daily RSI stands at 20, showing oversold and strong bearish momentum. The MACD also supports continued selling pressure.
If Bitcoin recovers, the next resistance level is near $85,000.
