Bitcoin Experiences Sharp Decline, Records a 10% Weekly Loss

On Friday (19), Bitcoin (BTC) experienced its most significant daily drop of the week, deepening its losses during this period. According to CoinGecko, the cryptocurrency recorded a 2.8% decline in the last 24 hours, bringing it to $41,327. In the national market, one Bitcoin fell to R$ 204,424.

As a result of this devaluation, BTC accumulates a 10% loss over the past seven days, ranking as the third-largest among the Top 10 during this period, following only Cardano (ADA) and AVAX. Interestingly, these two cryptocurrencies also led the daily losses in the Top 10, dropping by 3.8% and 5%, respectively.

Similar to Thursday (19), the BTC price drop affected almost all major cryptocurrencies. Only BNB escaped this trend, starting the day with a slight increase of 0.5%. In the Top 100, over 80 cryptocurrencies ended the day in the negative, with notable losses for HNT, down by 11.7%, and SUI, which lost 9.8%. TIA, on the other hand, posted modest gains of 2.7% and led the day's highest increases.

Bitcoin is on the verge of testing the $40,000 support. This is expected to be a region with significant trading volume, particularly from short-term traders, who may open long positions aiming for a slight increase. "I believe we will spend the weekend above this region but work below it in the following week," said Fernando Pereira, an analyst at Bitget.

Selling pressure triggers a surge in liquidations In the short term, the current scenario demands caution from investors, who should approach BTC carefully. Many miners are selling their cryptocurrencies, creating strong supply pressure. Without elevated demand to absorb these new Bitcoins, the price is likely to face further corrections in the short term.

This time, Bitcoin's sharp decline led to a surge in liquidation volume, which, according to Coinglass, increased by 157%, totaling $247 million. Long positions incurred losses of $209 million, with BTC standing out by liquidating $80.2 million.

On the other hand, traders operating short positions saw the market liquidate around $40 million. The individual highlight was the UMA token, causing losses of around $5 million. However, the largest individual liquidation hit a trader who lost $7.3 million in a Bitcoin operation.

Conclusion: In conclusion, the short-term outlook demands caution due to selling pressure from miners and the potential for further corrections. Traders should carefully navigate the market and assess the evolving dynamics to make informed decisions.

FAQs:

1. Is Bitcoin's recent drop a cause for long-term concern?

   • While short-term challenges exist, Bitcoin's historical resilience suggests potential for recovery.

2. What factors contribute to the selling pressure on Bitcoin?

   • The current surge in liquidations is fueled by miners selling their holdings, creating supply pressure.

3. How can investors navigate the current market conditions?

   • Investors should approach BTC cautiously, considering the ongoing dynamics and potential for short-term corrections.

4. Are there specific cryptocurrencies that resisted the market trend?

   • BNB demonstrated resilience with a slight increase, while TIA posted modest gains amid broader losses.

5. What is the significance of testing the $40,000 support level?

   • The $40,000 support level is crucial as it represents a region with significant trading volume, impacting short-term trader strategies.