- BTC tumbled to a new 18-month low, dragging altcoins with it.
- Bitcoin’s fall below the crucial $20,000 support could assist further downward price momentum.
- Bitcoin mining profitability has dropped by over 75% from the market top.
Still, in European hours Wednesday, the world’s largest cryptocurrency fell as much as 7.8% to $20,289, its lowest since December 2020.
BTC Below Crucial Psychological Support
On June 15, BTC tumbled to a new 18-month low, dragging altcoins with it and deepening a market meltdown sparked by crypto lender Celsius this week, freezing customer withdrawals.
The top cryptocurrency has lost over 31% in the last week and more than half its value this year. BTC’s price has slumped by over 70% from its all-time high price of nearly $69,000 made in November 2021.
Bitcoin’s fall below the crucial $20,000 support could assist further downward price momentum. A fall in BTC’s price below the crucial psychological support levels of $25,000 and $22,500 has spread distress across crypto and traditional markets.
Shockingly, the price of the largest cryptocurrency by market value has been in a downtrend for nine straight days – a record losing streak in pricing data going back to the early 2010s.
After a minor recovery wave was seen in the early hours of Wednesday as bitcoin price saw a fresh round of selling from $22,000. The price declined and broke the $20,500 support, leading to further sell-offs in the market amid extreme fear.
The top crypto asset traded close to the $20,000 level and settled below the 21 simple moving average. For bitcoin bulls, a push in price aimed at a recovery above the $21,000 level would be critical.
Notably, BTC price faced a significant resistance near the $21,600 level and the 21 simple moving average, as highlighted in a recent FXEmpire article.
The next major resistance for bitcoin is at $22,800; however, looking at the market a revisit of the under $20,000 zone could be expected in the near term.
Bitcoin Mining Profitability Suffers
Data from Glassnode highlights that bitcoin mining profitability has dropped by over 75% from the market top and is currently at its lowest since October 2020.
Bitcoin Miners to Exchange flow rose to a seven-month high of 9,476. This meant that miners sent an abnormally high volume of BTC to crypto exchanges amid the recent price downturn.
The rise in exchange flows presented that miners are currently selling their BTC, expecting the asset’s price to go down further. Miners liquidating could also be due to the net realized losses of the BTC network.
The miner Netflow to exchanges also turned positive. When the metric turns positive, it signifies that more coins are being sent to exchanges than are to private or cold wallets. Miner Netflow turning positive would indicate that miners are bearish on the price and are under pressure to sell.
Notably, bitcoin supply in loss (7d MA) reached a two-year high of 8,501,301.765 BTC, indicative of the network and holders in pain.
While volatility and bearish spells are a constant in the market, BTC price has never fallen below the all-time high of the previous cycle. Over the last decade, BTC’s price has seen numerous bull cycles followed by a significant decline from the all-time highs.
However, with BTC’s current price trading very close to its 2017 all-time high price of $19,783, any further sell-off from this point could push the cryptocurrency to the 2017 territory.
Data from Santiment presented that traders were reacting to the major price drops this week, and the 4.5-year high in bitcoin’s daily token circulation indicates how polarized the market was.
Around 497k unique BTC were moved to start the week, the highest amount since December 6, 2017.
📉 It's no surprise to see #Bitcoin transactions being made in waves of realized losses. And this past week has actually seen the most realized losses since this data was available in 2009. High capitulation spikes can & will eventually foreshadow bottoms. https://t.co/7w7XlopIKD pic.twitter.com/nqXfjSPvJE
— Santiment (@santimentfeed) June 15, 2022