Bitcoin Prices Fell Below $58,000 As Various Factors Fueled Losses
Bitcoin prices have suffered some notable declines over the last few days, dropping from nearly $65,000 to less than $58,000 as multiple variables have combined to push the cryptocurrency lower.
The digital currency, the world’s largest by total market value, fell to roughly $57,850 today, according to Coinbase data provided by TradingView.
The cryptocurrency declined to this level after rising to more than $64,800 on August 25, additional Coinbase figures from TradingView reveal.
The digital asset has since recovered some of these losses, trading close to $59,100 at the time of this writing.
‘Strong’ Technical Resistance
After reaching its loftiest value in roughly three weeks on August 25, bitcoin may have changed course and started trending lower as a result of encountering significant technical resistance close to the $64,000 level, according to Julio Moreno, head of research for CryptoQuant.
“The selling could have been triggered by technical factors as the price found resistance around the $64K mark, which is the On-chain trader’s realized price, a key technical level,” he stated.
The chart below depicts this on-chain realized price along with the corresponding profit or loss:
Robust Exchange Inflows
On August 26, when bitcoin was already heading lower, a significant amount of the cryptocurrency flowed onto spot exchanges, according to additional CryptoQuant data.
The substantial movement of the digital currency onto these marketplaces, which happened again on August 27, signalled selling pressure, Moreno noted.
The chart below illustrates these movements:
These developments helped accelerate bitcoin’s downward movement, he claimed.
Long Squeeze
The decline in bitcoin caused a long squeeze, meaning that many traders had to liquidate their long positions as the cryptocurrency fell in value.
Steven Lubka, head of Swan Private at Swan Bitcoin, singled this out as a major contributor to the notable decline the digital asset suffered over the last several days, clarifying this via email.
The chart below illustrates the sharp increase in liquidations that took place on August 27:
Nvidia Results
Another major factor that analysts singled out as having an impact on bitcoin’s recent price movements was the market’s response to the latest financial results issued by chipmaker Nvidia Corporation, which trades under the ticker symbol NVDA.
Tim Enneking, managing partner of Psalion, commented on these results, as well as the impact they had on a wide range of risk assets.
“As for today’s specific move, it’s correlated with fiat markets and the outlandish expectations for Nvidia revenue and profit – which exceeded predictions in all cases, but didn’t blow out the high end of the various analysts’ ranges,” he stated via email.
“So it’s down 8% (as of this writing) in after-market trading and has been dragging every risk-on market down for the past 24 hours or so because of ‘fear’ of precisely these results,” Enneking added.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.
