Recently, Bitcoin‘s price fell below the $42,000 mark, triggering concerns of a continuing downward trend. This drop in price has led to reduced investor confidence and an increase in long position liquidations.
In the last two days, Bitcoin’s price has fallen below two significant thresholds, with the daily chart showing a dip under $42,000 on December 17. This downward trend has been characterized by movements since the price surpassed $40,000. The Moving Average Convergence Divergence (MACD) trend has also turned negative, indicating a potential bearish trend.
The Relative Strength Index (RSI) line around 50 corroborates this observation, suggesting a weak bullish trend with a possible shift to a bearish trend in the short term. Despite the recent price drops, the general sentiment remains positive but is showing signs of decline. Additionally, the funding rate fell to around 0.010% from 0.014% on December 17.
Funding rate data indicates a reduced optimism among traders for a price increase, with more long positions being liquidated than short positions. According to Coinglass, over $30 million in long positions and over $5 million in short positions were liquidated on December 17, a trend that continued at the time of the report. Latest data shows liquidations over $29 million for long positions and around $3 million for short positions.
Meanwhile, the Bitcoin exchange flow chart reveals an increase in BTC movements on exchanges, which could signal a potential sell-off wave explaining observed price volatility. At the time of writing, there were signs of a temporary halt in inflows and a significant increase in outflows, with more than 2,000 BTC withdrawn from exchanges.