The cryptocurrency market saw another drop today, with Bitcoin, Ethereum, Dogecoin, and XRP experiencing significant price decreases. This drop is attributed to several factors, with one of the key reasons being the CME price gap that Bitcoin needs to fill at lower levels.
According to CoinMarketCap data, market analyst Hardy mentioned that Bitcoin filled a price gap between $93,500 and $92,700 today, but it still needs to drop to $85,000 to fill another gap. Additionally, another gap at $77,900 remains unfilled. Hardy believes that the selling pressure to fill these gaps will continue, and the sooner it happens, the higher the chance of Bitcoin’s bullish reversal.
Another analyst, Titan of Crypto, pointed to a price gap between $92,900 and $85,700 and emphasized that Bitcoin typically fills these gaps. He had previously predicted a price correction, which is now occurring.
Ethereum, Dogecoin, and XRP Price Drops
Bitcoin’s price drop has a direct impact on other major altcoins. In this regard:
- Ethereum (ETH), which is highly correlated with Bitcoin, has experienced a sharp price decline.
- Dogecoin (DOGE), which typically follows market fluctuations, has also seen a similar downward trend.
- XRP is under selling pressure due to uncertainty surrounding its legal case and reduced demand.
Increased Liquidation in the Market
Data from Coinglass reveals that this sudden market crash led to the liquidation of over $213 million in long positions within the past four hours, while short positions were only liquidated for $18 million. This suggests that many traders did not anticipate the drop and had used high leverage in their trades.
Market Reactions to Trump’s Statements
Yesterday, U.S. President Donald Trump announced that the strategic crypto reserve would include altcoins like Solana, Cardano, and XRP. This news triggered mixed reactions from market participants, as many traders expected the reserve to only include Bitcoin.
Although the market initially reacted positively to this news, uncertainties about the decision and the composition of the strategic reserve have raised concerns among investors. Arthur Hayes, one of the co-founders of BitMEX, downplayed the news, emphasizing that the decision would not be implemented without Congressional approval.
Impact of New Policies on the Crypto Market
Meanwhile, Trump’s announcement regarding a 25% tariff on Mexican and Canadian goods starting tomorrow, as well as the increase in Chinese tariffs from 10% to 20%, has increased selling pressure in the market, leading to further declines in cryptocurrency prices. Analysts believe the current bearish trend may be short-lived, but the impact of macroeconomic policies on the market should not be ignored.
Bitcoin Technical Analysis and Key Support/Resistance Levels
Based on market data, there are several important support and resistance levels for Bitcoin:
- Key Support: $85,000 (CME gap)
- Next Major Support: $77,900 (next gap)
- First Resistance: $92,700 (filled area)
- Critical Resistance: $93,500 (previous breakdown level)
If Bitcoin loses the $85,000 level, the likelihood of a further drop to $77,900 is high. On the other hand, if buyers can stabilize the price above $92,700, a bullish reversal can be expected.
Is This Price Correction a Buying Opportunity?
The recent market crash could present a buying opportunity for long-term investors, but risk management is crucial. Some strategies that traders use in such conditions include:
✔️ Dollar-Cost Averaging Strategy: Entering the market in multiple stages and buying at different levels.
✔️ Monitoring Trading Volume: A rise in volume near support levels can signal a trend reversal.
✔️ RSI Indicator Check: If the RSI drops into oversold territory (below 30), it may signal a buying opportunity.
Conclusion
🔹 Bitcoin’s drop to $87,000 was influenced by CME price gaps.
🔹 Analysts believe that open gaps at $85,000 and $77,900 remain unfilled.
🔹 The selling pressure, intensified by widespread liquidation of long positions, has exacerbated this correction.
🔹 Trump’s statements about the strategic crypto reserve and increased trade tariffs have also impacted the market.
🔹 Technical analysis shows that $85,000 is a key support level, and if broken, further price declines are likely.
❗️ Note: This article is for analytical purposes only and is not a recommendation for buying or selling.
Source: CoinGape
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