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Daily Bitcoin Analysis

Daily BTC Analysis

Tuesday, February 23, 2021

If you missed it the first time, the great dip of February 2021 ran a repeat today, and if we go back to all-time highs and you didn't buy the dip: Don't moan, you had two chances!

On the flipside, this dip may turn into something more sinister, which would be awesome. A bigger dip to buy! Jokes aside, over $5B of long Bitcoin positions have been liquidated over the last 2 days. Today, all the action happened on a break below $47,000, but had you blinked, you would have missed all the price action below this level. Incredible when you consider how many Bitcoins changed hands during that move: nearly $1B in a matter of minutes.

Prices rebounded quickly but have yet to escape from danger, and $45,000 is now the target for the bears who are looking to liquidate further leveraged positions.

On-chain data suggests this price move has been too much for smaller holders. The chart below shows those wallets with a balance of 1 or more BTC declining in a straight line since this sell-off began.

We now have to wait and see the reaction of those who have been pushed to the sidelines, thrown in the towel, and gone for a walk.

Confidence and sentiment are key drivers of markets, and crypto is no different, only we own Twitter and the volume is turned up to 11.

Now we wait to see if the news that Tether has agreed an $18.5M settlement with the New York Attorney General will help stabilize the market this evening.

Technical Analysis

Failure to hold the key $54,000 level overnight has led to deeper losses for Bitcoin today. As prices slid earlier in the trading day, a flurry of auto-liquidations cascaded and drove Bitcoin directly down to support at $44,900. The bounce from this level was a clear indication of over-extension as the market struggled to take down a raft of supply in a few short minutes.

For the next 24 hours, the $42,000 level will be critical for the bulls. Failure to hold will likely lead to further liquidations and a return to a $30,000 handle for Bitcoin.

A close above $50,650 is the first step for the bulls as they look to regain control of prices: A task that has been seemingly simple for the last few months. Should we advance, then $54,000 will act as resistance before anyone can consider a move back to the all-time high.

Market Data

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