Anybody who thought that Bitcoin had hit the floor in the latest bearish market should think again. On February 27, the crypto market experienced a severe drop as Bitcoin price threatened to sink towards $8,500.
According to data provided by Skew on February 26, more than $150 million worth of Bitcoin was liquidated on the BitMEX trading exchange. That amount is the most seen since the start of 2020. Millions of dollars of long and short positions resulted in a huge drop in Bitcoin price at one point hitting $8,580, a loss of over 6% in the last 24 hours.
$150mln+ liquidations on BitMEX today – highest in 2020 pic.twitter.com/WO7aKyNhcI
— skew (@skewdotcom) February 26, 2020
Even though the Bitcoin price slightly rebounded to the $8,813 level, it may prove to be a difficult recovery for the cryptocurrency. On February 16, Bitcoin lost almost $400 within an hour, bringing the price significantly below $10,000.
Traders are currently getting ready for the possibility of the price plunging further towards $8,000. Such a drop will affect the impression of the flagship token before its halving event scheduled for the week of May 18.
Nevertheless, some observers are more optimistic in a dominantly red market. The co-founder of Fundstrat Global Advisors, Tom Lee, predicted that the price of Bitcoin would top $27,000 by this summer according to its 200-day moving average.
Currently, BTC price is still exploring the depth of the rabbit holes, with sellers’ confidence levels incredibly high. The trend line appears to be inclined to the south, while the volatility levels are significantly high.
Global economy impacts crypto markets
Most of the crypto exchanges and blockchain technology companies have experienced the impact of the potential global epidemic of coronavirus dubbed COVID-19. The employees at Chinese companies responsible for mining have now been forced to stay at home. On the other hand, others are trapped outside of cities as quarantines are enforced around China.
The reason for the latest Bitcoin drop is not known yet. But, it proves that the crypto market can be quite as fragile as the traditional investments. On February 15, the price of XRP imploded rampantly, losing about 60% on BitMEX.
Many always believe that it gets darker just before dawn. In that context, the Bitcoin proponents think that the current declines may soon lead to a rally. According to them, the price will likely explode past $10,000. Nevertheless, the rally will highly depend on the ability of the flagship token to find some inspiration for bullish momentum.