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Bitcoin briefly slipped below $90k a few minutes ago, shocking many. It lost almost 3% in 1 hour, shedding $2,500.
BTC had a similar decline during the previous intraday session. However, it rebounded, leading to gradual acceptance that the worst may be over as several indicators flashed green signals.
Investors were aggressively accumulating at $91k. CryptoOnchain noted that the bulls were stacking up the asset, pointing to the removal of existing supply from the Binance orderbook as a reason for the conclusion. “New selling pressure is virtually non-existent,” he added.
However, current trading action suggests the reverse is the case. The massive $2.5k drop in the past hour indicates a reversal in the earlier stance, as investors resume selling.
Investors lost a whopping $190 million in the past hour, and the long positions accounted for 95% of the losses. The second-highest rekt capital happened on Bitcoin as traders lost over $44 million.
Bitcoin has rebounded following its retracement below $90k and trades slightly above the mark. The apex coin dipped after news of a fresh rate hike caused panic across the market.
The Bank of Japan announced it would raise interest rates by 25 bps on December 19. Cryptocurrencies are reacting to this announcement as investors fear the effect on the US due to Japan holding a large portion of US debt.
Aside from the bearish announcement from the Asian country, the market also succumbed to another wave of uncertainty from the US. One of the biggest tech companies in the United States announced positive earnings but dropped 5% pre-market after failing to report the timing of AI revenue and two other key data points.
All the negative fundamentals culminated in the ongoing selloff affecting Bitcoin and the rest of the market.
The apex coin has held trading above the $89k support since Monday, veering closer to flipping it multiple times but halting around $89.5k.
The same scenario may be playing out at the time of writing as the apex coin returned to $90k shortly after breaking the level. However, this does not mean that the downtrend is over. The bulls are currently trying to stage buybacks with limited success.
Nonetheless, the liquidation map shows why they are defending the $89,000 support. Many long positions have their liquidation prices at this key level, and losing it will result in massive losses for the bulls. It remains to be seen how long it will hold.
A recent analysis noted another bearish factor that may worsen the downturn. It stated that BTC is currently trading below the short-term holder cost basis. While some accumulate, others may panic-sell as fundamentals flip bearish.
The 1-day chart indicates growing odds of the $89k support breaking. On Wednesday, Bitcoin broke above its bollinger bands after flipping the $94k barrier. It has since struggled to surge and trend between the upper and middle bands. Traditionally, a drop to the lower band may follow.
Failing to keep prices above the highlight may result in a drop to the lower line at $85k. Additionally, the moving average divergence is gradually responding to ongoing price trends. The 12 EMA is on the decline, indicating an impending bearish convergence if current conditions remain the same.
The post Bitcoin on the Brink: $89K Tested After BOJ Rate Hike Sparks Chaos. WIll it Hold? appeared first on CoinTab News.
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