Bitcoin's value plummets to $104,000 amid heightened US-China conflicts.
Article:
Bitcoin's price has plunged to a low of approximately $103,700 in the past few hours, subsequently recovering to around $104,100 at the time of writing. This steep decline has triggered total liquidations of around $844 million across the derivatives market, according to Coinglass. In the past hour alone, liquidated Bitcoin positions exceeded $226 million, with a staggering $220 million of that being long positions.
Simultaneously, major stock markets, including the S&P 500, Nasdaq, and the Small Cap 2000, have experienced notable declines, with the S&P 500, Nasdaq, and the Small Cap 2000 dropping more than 1%, while the DJI fell by 0.6%.
The fall in Bitcoin's price appears to be attributed to bearish patterns and sentiments in the market. Bitcoin has been forming a bear flag pattern on the four-hour chart, a classic bearish continuation setup signaling a potential drop, with targets near $97,000 if key support levels, such as the $100,000 psychological level, are breached. The weakened bullish momentum and the failure to rise above certain resistance levels have further contributed to the price decrease.
Escalating tensions between the US and China may also play a role in the decline, as Donald Trump accused China of violating an agreement, threatening retaliation on Truth Social. Meanwhile, China has responded, urging the US to "immediately correct its erroneous actions, cease discriminatory restrictions against China and jointly uphold the consensus reached at the high-level talks in Geneva."
While the interconnectedness of financial markets means that stock market performance could potentially impact Bitcoin's price, technical patterns and sentiments specific to Bitcoin seem to be the primary factors contributing to the recent price drop.
Bonus Information:
- Net outflows from US spot Bitcoin exchange-traded funds (ETFs) have been noted, such as the $347 million outflow recorded on May 29, which could impact investor confidence.
- Bitcoin is currently entering a consolidation phase, a "healthy pause" before potential future upward movements. However, this could also result in lower price levels being tested.
- The decline in Bitcoin's price might have been exacerbated by net outflows from US spot Bitcoin exchange-traded funds (ETFs), as substantial outflows, such as the $347 million recorded on May 29, can affect investor confidence.
- The recent price drop in Bitcoin can be attributed not only to the declining performance of major stock markets but also to technical patterns and sentiments specific to cryptocurrency, such as the formation of a bear flag pattern and the weakened bullish momentum.
- Cryptocurrency traders and investors should pay close attention to the ongoing consolidation phase in Bitcoin, as it could signal a period of testing lower price levels before potential future upward movements, a concept often referred to as a "healthy pause" in the technology-driven finance arena.
