Bitcoin Price Hits $72.8k, Bitwise CIO Turns Bearish; Is Sub-$70k Next?
Bitcoin (BTC) price has experienced a significant selloff, leading the wider crypto market in a downward trend. The price of Bitcoin dropped below the crucial buy zone around $80k last week, and today, on February 3, it hit a low of $72,889 for the first time since early November.
The recent selloff has resulted in over 167k leveraged traders being liquidated, with more than $730 million being wiped out in the past 24 hours. A majority of the liquidations involved long traders, contributing to a notable decline in Bitcoin’s Open Interest (OI). According to data from CoinGlass, Bitcoin’s OI has been steadily decreasing since the crypto capitulation on October 11, currently hovering around $52.7 billion.
Matt Hougan, the CIO of Bitwise, issued a cautionary note following today’s price drop, stating that Bitcoin is currently in a multi-month bear market. He emphasized that despite high institutional adoption and regulatory clarity, investors have been blindsided by the ongoing bear market. Hougan compared the current market conditions to the infamous crypto winter of 2022, attributing the downturn to factors such as excess leverage and profit-taking by early adopters.
Despite the current bearish sentiment, Hougan believes that the Bitcoin market may be approaching its bottom, as the four-year bear cycle nears its end. He remains optimistic about the potential for a bullish rebound driven by regulatory progress and continued institutional adoption.
Onchain data from Santiment indicates that major Bitcoin investors have been selling aggressively, while retail investors are buying back, signaling a classic sell signal. From a technical analysis perspective, if Bitcoin fails to defend the $73k support level in the coming days, a further correction towards $69k could be imminent.
In conclusion, the cryptocurrency market remains volatile, with Bitcoin facing pressure from both technical and fundamental factors. Investors are advised to conduct thorough research and exercise caution when making investment decisions in such uncertain market conditions.
