The price of Bitcoin continues to decline and fell by 15% yesterday. Thus, over the past 7 days, the first cryptocurrency has fallen by 28%. Trading volumes increased sharply and amounted to $70 billion. The last time a similar performance could be observed a month ago during the collapse of the UST stablecoin and the Terra project.
Bitcoin has been falling almost non-stop for the last 7 days. It all started over the weekend. First, there was news about a new depeg in the crypto industry between the price of stETH and ETH. Depeg was about 5% and panic began in the community. Because of this, ETH fell 33% and caused Bitcoin to fall by 15%.
However, yesterday it became known that the Celsius centralized lending protocol has a large collateral position in Bitcoins in the MakerDAO protocol. Moreover, due to the recent fall, the market price has significantly approached the liquidation price. In this regard, Celsius closed the withdrawals of funds and its price collapsed by 50%. All this led to even more panic in the market.
As a result, the price of Bitcoin dropped to $20,800 last night. This has resulted in massive liquidations of over $1 billion across major cryptocurrency exchanges. Of particular interest is the fact that the volume of liquidation of short and long traders turned out to be almost identical. This situation is atypical in such a market and indicates the manipulative nature of this decline.
The chart clearly shows that after exiting the side channel, Bitcoin almost immediately went into a recoilless fall. All this happened on volumes 3-4 times higher than during the sideways movement. We warned about this development, but did not expect such a rapid decline down to $20,000.
All indicators have significantly moved into the oversold zone. However, this does not mean that the fall is over. Most likely, with the opening of the American trading session, Bitcoin may experience another strong round of decline. The $20,000 level will be decisive.
There is a possibility that today Bitcoin will fall under an important psychological level. This can happen quite quickly, in the form of a long squeeze, and also lead to a massive number of liquidations. Therefore, trading in such a market is an extremely unfavourable occupation. We need to wait until the market calms down a bit.