Bitcoin Crash Imminent? BTC Breaches Crucial Level

The post Bitcoin Crash Imminent? BTC Breaches Crucial Level appeared first on Coinpedia Fintech News

Bitcoin (BTC), the world’s largest cryptocurrency by market cap appears bearish and is poised for a notable price decline in the coming days. The bearish outlook is driven by overall market sentiment and the recent breakdown of a crucial support level at $66,500.

According to CoinPedia’s technical analysis, BTC appears bearish as it failed to sustain above the $66,500 level. In addition to this, it has further formed a bearish engulfing candlestick pattern on the daily time frame at the upper boundary of the descending channel pattern. 

However, this upper boundary is a level where the asset has experienced notable selling pressure earlier. Since March 2024, BTC has reached this level more than six times, with each instance followed by a price decline of over 20%. This time, the chart pattern appears similar to the previous ones

Based on the price action and historical momentum, if BTC closes its daily candle below the $66,400 level, there is a strong possibility the asset could decline by 10% to reach $60,000 in the coming days.

Bitcoin’s negative outlook is further supported by on-chain metrics. According to the on-chain analytics firm Coinglass, BTC’s Long/Short ratio currently stands at 0.93, indicating a strong bearish sentiment among traders.

Additionally, its open interest has declined by 4,2% over the past 24 hours, indicating liquidation of long positions following a recent breakdown of support level.

As of now, the major liquidation levels are at 65,710 on the lower side and $68,150 on the upper side, with traders over-leveraged at these levels, according to the Coinglass data.

If sentiment remains unchanged and the price declines to the $65,710 level, nearly $558.2 million worth of long positions will be liquidated. Conversely, if the sentiment shifts and the price soars to the $68,150 level, approximately $1.31 billion worth of short positions will be liquidated.

At press time, BTC is trading near $66,390 and has experienced a modest price decline of 1.1% in the past 24 hours. During the same period, its trading volume declined by 26%, indicating lower participation from traders and investors compared to previous to days.