Bitcoin in the Red: Analysis of the Recent Price Drop Amid SEC Fears
On February 10th, Bitcoin faced a bearish turn as it dropped to its target zone, failing to hold support above $22,000.
According to data from CoinMarketCap, the BTC/USD pair went down to $21,633. The drop was largely due to regulatory concerns in the United States, however, the pair had already been facing bearish sentiment for several days, with traders predicting a potential retest of $21,000 or even lower.
At the time of writing, Bitcoin was trading at approximately $21,800, which represents a 7% decrease in February so far. The crypto market was filled with uncertainty as Cointelegraph contributor Michaël van de Poppe, the founder and CEO of trading firm Eight, questioned, “Bear market back or are we just having a slight correction?”
Many traders had short positions as the price of BTC conformed to their expectations. Popular trader Crypto Tony was eyeing $21,400 as a potential bounce zone in case the losses continue to materialize.
He wrote, “Profit coming in nice on the short and my next target is the support cluster at $21,400. If we see a retest of $22,300 then this could be your chance to get in, upon a failed retest.”
For those who still held long positions, the night was intense as they experienced significant losses. According to Coinglass data, the total long liquidations for Bitcoin alone on February 9th reached $64.6 million.
Looking beyond the immediate price performance, Venturefounder, a CryptoQuant contributor, focused on the possibility of the macro bottom for Bitcoin. If the BTC/USD were to preserve its 200-day moving average near $20,000 or even $19,000 as support, he argued, it could have significant implications for the future price action.
In a follow-up post, he stated, “Holding the $19-20k during this correction would be the first confirmation that $16k was the Bitcoin cycle bottom.”
However, the future of Bitcoin is uncertain at the moment, with traders divided on whether the recent drop in price is just a correction or the start of a bear market. While some traders are taking advantage of the situation by taking short positions, others are holding on to their long positions and waiting for a potential bounce. Regardless of the short-term price action, the ability of Bitcoin to preserve its 200-day moving average near $20,000 or even $19,000 as support may have significant implications for its future price action.
