Bitcoin Drops to 3-Month Low Below $25,000, Where to Next?

Bitcoin prices fell to $24,820 in early Asian trading on Thursday morning. It is the lowest the asset has traded for since March 16, three months ago.

A thousand dollars was shaved off the price of BTC in less than an hour resulting in a daily loss of 3.6%.

At the time of writing, BTC had recovered to trade just at around the $25,000 price level but was still looking bearish.

Bitcoin Bears Back in The Seat

The Bitcoin slump follows a Federal Reserve announcement that it had paused interest rate hikes in June. It is the first time it has been halted following ten consecutive rate hikes since March 2022.

BTC has now broken out of its range-bound channel and has been gradually down-trending since mid-April. There is some support at current levels, but a further decline is looking likely.

Longer-term charts are also looking increasingly bearish, with some analysts predicting that a “summer lull” is coming.

Looks like the summer lull is happening #BTC pic.twitter.com/NTnNvXrTBo

— Benjamin Cowen (@intocryptoverse) June 14, 2023

On the derivatives side, there are billions in liquidations at lower levels, according to ‘Bleeding Crypto,’ so a breakdown from current BTC price levels could see markets tanking fast. On June 15, he said:

“There is $63.9 billion worth of liquidations at $24,200 and $52.3 billion at $21,800 but your Bull maxies want to convince you that “everything is ok” “we are about to go higher”.”

Furthermore, the Bitcoin Fear and Greed Index has fallen to its lowest level since the mid-March market slump. The sentiment indicator was reading ‘fear’ at 41 at the time of writing.

Analytics firm Santiment noted that trader sentiment is “officially at its most negative level since Covid crashed markets in March 2020.”

😱 With a combination of falling #crypto prices and rising concerns about #Binance & #Coinbase, trader sentiment is officially at its most negative level since #Covid crashed markets in March, 2020. These situations are often #buythedip opportunities. pic.twitter.com/tBhqXRU4XU

— Santiment (@santimentfeed) June 14, 2023

Elsewhere on Crypto Markets

Total market capitalization has fallen by 3.6% on the day to $1.06 trillion as almost $40 billion exited the markets.

As usual, Ethereum and the rest of the altcoins are getting hit much harder than their big brother. ETH had slumped 5.5% on the day in a fall to $1,648 at the time of writing. The asset is now trading back at February’s resistance levels which have now turned to support.

Altcoins were taking an even bigger hit, with between 4% and 7% in daily losses for most of the high-cap crypto assets.