Bitcoin (BTC) price fell 6 percent in less than 4 hours as of March 15, after hitting a record high over the weekend.
There are three key factors behind the weakening momentum: weekly reset correction, high funding rates and stablecoin inflow that has kept the market up so far.
New weekly candle and reset correction
Bitcoin often fluctuates greatly when a new weekly candle opens. The trend that occurs on Mondays can determine how Bitcoin will perform for the rest of the week.
As reported by “Rekt Capital”, one of the analysts, Bitcoin saw an extreme retracement. This move in BTC price can be viewed as a “temporary reset”. Trader: told:
“BTC retreated into the red zone and fell below. There is time for now. So the price can still recover into this red boxed area and turn it into support. Technically, BTC is in a fluctuating retest process.”
If Bitcoin fails to recover from the $ 55,000 area, it is likely to see a hard correction towards the $ 46,700 support level.
Futures market overheated
When the Bitcoin price started to decline, the BTC futures market funding rate hovered above 0.1 percent on major exchanges.
This indicates that the overwhelming majority of the market has bought Bitcoin and an extremely intense trading process is taking place.
According to data from Bybt.com, 194,541 traders have cashed in about 1.83 billion dollars in the last 24 hours. This amount is the highest since February 21st.
This liquidation wave caused Bitcoin to drop below $ 57,000, and Cointelegraph Markets analyst Michael van de Poppe said this as the key support level. he defined.
“Bitcoin is barely holding this critical level. It has to continue upwards, otherwise the price will drop to a lower support level.”
Large deposits and stablecoin entries
Before the drop occurred, on-chain data analytics platform CryptoQuant drew attention to the BTC deposits loaded on the Gemini exchange.
Gemini, along with Coinbase, is one of the leading Bitcoin exchanges in the United States and is often considered the “whale exchange”.
CryptoQuant CEO Ki Young Ju on the subject he wrote:
“It became clear that there were 18,000 BTC transactions from users’ cold wallets to hot wallets on the Gemini exchange. The average entry into the stock markets skyrocketed due to these heavy deposits. If you are in a long position, do not use excessive leverage.”
Adding to the selling pressure from whales, the recent Bitcoin rally that saw inflows of stablecoins on exchanges was another bearish sign. That the rally has catalyzed this by the marginalized capital held in stablecoins rather than institutions in the United States. told:
“The Coinbase Premium Index was moving significantly higher every time the BTC price exceeded the 20,000, 30,000, 40,000 and 50,000 levels. This time it turned negative when the price exceeded 60,000. This indicates that the 60,000 bull rally was not driven by US institutions, all came from stablecoins. . “