Price crash: Bitcoin plunges to $60K, triggering $2.65B in liquidations
Technicals: RSI at 25 oversold, key $58K support from 200-week MA and Fibonacci levels
Catalysts: ETF outflows, risk-off sentiment, and macro tightening drive the sell-off
Market Status
BTC dropped to $60,000, its lowest since September 2024, before recovering to $70,202, up 5.08% in 24 hours
$2.65B in liquidations occurred, with over $817M in just four hours, primarily long positions
Market cap fell below $1.4T, down from its peak, with a 7-day change of -10.96% and 30-day change of -22.65%
Spot Bitcoin ETFs saw significant outflows, with over $800M exiting recently and more than $3B in January
Trading Strategy
Key support identified at $60,000, with stronger support at $58,000 from the 200-week moving average and 61.8% Fibonacci retracement
Resistance levels are at $67,200, $68,500, and $69,000, which has now flipped from support to resistance
RSI is at 25 on daily charts, indicating an oversold condition that could lead to a bounce, but the weekly RSI at 35 suggests sustained weakness
A daily close above $77,950 is needed to reclaim the Supertrend indicator and signal a bullish reversal
Consider a cautious accumulation strategy in the $60,000-$63,000 range, with a stop-loss below $58,000 to manage risk
Core Driving Factors
Massive liquidation event exacerbated the downturn, creating a snowball effect of forced selling during high volatility
Spot Bitcoin ETFs experienced substantial outflows, with over $800M exiting in recent days, indicating institutional capital moving to a "risk-off" stance
Broader risk-off sentiment in financial markets, mirroring downturns in technology stocks and precious metals, contributed to the sell-off
Tighter liquidity expectations and higher interest rate forecasts reduced Bitcoin's appeal as a risk asset, increasing its correlation with the Nasdaq
The nomination of Kevin Warsh as Federal Reserve chair, signaling tighter monetary policy, further fueled the broad selloff in risk assets Link
Risk Warning
The Crypto Fear & Greed Index plummeted to 8, indicating "Extreme Fear," which historically can signal a potential market bottom but also high volatility
High leverage in the market contributed to the $2.65B in liquidations; traders should reduce leverage and set strict stop-losses to manage risk
If the $60,000 support fails, the price could drop further towards the mid-$50,000 region, requiring close monitoring of key technical levels
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