- Bitcoin’s price plunges to a 3-month low below R450,000, marking a significant decline for the cryptocurrency.
- The Federal Reserve’s decision to halt interest rate hikes in June contributes to the bearish sentiment and downward trend in Bitcoin’s price.
- The wider crypto market also faces losses, with altcoins experiencing greater declines compared to Bitcoin. Ethereum slumps by 5.5% and other high-cap crypto assets suffer daily losses ranging from 4% to 7%.
In a significant development for Bitcoin investors, the cryptocurrency witnessed a sharp decline, dropping to as low as R449,993 during the early Asian trading on Thursday morning. This price level marks the lowest Bitcoin has traded at since March 16, a span of three months.
Within a short span of less than an hour, Bitcoin’s value suffered a decline of $1,000, resulting in a daily loss of 3.6%. As of the time of writing, Bitcoin had managed a slight recovery and was trading around the R450,000 price level, although the overall outlook remained bearish.
The Bears Take Control
This recent slump in Bitcoin’s price follows an announcement by the Federal Reserve regarding the halt of interest rate hikes in June. It marks the first pause in rate hikes after a streak of ten consecutive increases since March 2022.
Bitcoin has now broken out of its range-bound channel and has been gradually trending downwards since mid-April. While there is some support at current levels, indications point towards a potential further decline.
Analysts studying longer-term charts also suggest a growing bearish sentiment, with some predicting an impending “summer lull.” Additionally, on the derivatives side, there are substantial liquidations anticipated at lower price levels, according to ‘Bleeding Crypto.’ If Bitcoin’s price breaks down from its current levels, it could trigger a rapid market downturn. On June 15, Bleeding Crypto mentioned the staggering figures:
“There is R1.16 trillion worth of liquidations at R436,120 and R953.6 billion at R380,840, but your Bitcoin maximalists want to convince you that ‘everything is okay’ and ‘we are about to go higher.'”
Furthermore, the Bitcoin Fear and Greed Index has reached its lowest level since the mid-March market slump, currently reading ‘fear’ at 41. Santiment, an analytics firm, highlighted that trader sentiment has reached its most negative level since the market crash caused by the COVID-19 pandemic in March 2020.
Exploring the Wider Crypto Market
Total cryptocurrency market capitalization experienced a decline of 3.6% in a single day, dropping to R15.38 trillion as nearly R560 billion exited the markets.
As is often observed, Ethereum and other altcoins faced a more severe impact compared to Bitcoin. At the time of writing, Ethereum had slumped by 5.5% in a daily fall, reaching R23,862. The asset is now trading around the support levels that were previously resistance levels in February.
Altcoins, in general, were hit even harder, with high-cap crypto assets experiencing daily losses ranging from 4% to 7%.
As Bitcoin’s price experiences a significant downturn, it is crucial for local investors to closely monitor the developments and adjust their investment strategies accordingly. The crypto market’s volatility necessitates careful observation of support and resistance levels to make well-informed decisions.
In conclusion, Bitcoin’s recent plunge to a 3-month low below R450,000 signals a bearish trend, raising concerns among investors in South Africa. As market dynamics continue to evolve, vigilance and strategic planning are crucial for crypto enthusiasts in the region.
*All currencies have been converted to South African Rand