Bitcoin (BTC) Price Crashes to $59,000 as Bears Dominate the Market, Targets $58,000

The recent sharp fall has liquidated $9.92 million worth of long positions out of $10.20 million of total liquidation.

Bitcoin (BTC) price took a nosedive on December 15, falling from $61,000 to $59,000 despite kicking off the Asian trading session with a 4% gain. However, the tables turned rapidly, and BTC price dropped sharply, leading to $9.92 million in long positions being liquidated out of a total $10.20 million in liquidations, on-chain data from CoinGlass shows.

But why is Bitcoin price falling?

Zooming out to examine the broader marketの様子をうかがうと, short sellers appear to be dominating the market, applying substantial selling pressure.

One potential factor driving this sell-off is a lack of enthusiasm from exchange-traded fund (ETF) traders, evidenced by two consecutive days of negative ETF net flow. CoinGlass data reveals that the US spot Bitcoin ETF experienced a negative flow of 1.77K BTC.

Moreover, CryptoQuant data indicates negative funding rates, which typically signify bearish market sentiment. According to CoinGlass, BTC’s funding rate currently hovers around -0.002.

Together, these on-chain metrics suggest bearish market conditions, with short sellers at the helm. Should BTC price continue to fall and reach the $58,500 level, about $421 million in long positions could be liquidated.

Now, let's perform a technical analysis of Bitcoin price and identify upcoming support levels.

BTC daily chart analysis

The daily chart for BTC paints a bearish picture, with the price trading below the 200 Exponential Moving Average (EMA) on the daily time frame, indicating a downtrend.

Currently, BTC price faces resistance at the 200 EMA, which has rejected the price from moving higher. This resistance level coincides with the Fibonacci retracement level of 23.6%, indicating a strong technical barrier.

If BTC price fails to break through this resistance level and continues to fall, the next support level lies at $58,000, a crucial support level that has held Bitcoin from falling further on multiple occasions.

However, if BTC price fails to hold this level and closes a daily candle below $57,000, it could fall to $54,000 in the coming days.

BTC open interest, trading activity analysis

As BTC price dropped significantly by over 3.5% in the last three hours, BTC open interest declined by 3.1%, according to CoinGlass data.

At press time, BTC is experiencing massive selling pressure and is currently trading near the $59,085 level and has seen a price drop of 0.5% in the last 24 hours. Meanwhile, its trading volume has dropped by over 30% during the same period, indicating lower participation and increased fear among traders.

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