Bitcoin price falls below $39,000 as indicators suggest risk of a deeper correction, according to Bitfinex

The bitcoin price has fallen below the $39,000 mark, leading to an increased risk of a further price correction from the short-term holder cohort, Bitfinex analysts said. “The tendency of short-term holders to react more acutely to short-term market fluctuations means there is a possibility of a further substantial price correction, with critical support levels only at $38,000 and $36,000,” they noted.

According to Tuesday’s Bitfinex Alpha Report, bearish sentiment appears to be prevailing in the market. “The next crucial price levels for bitcoin that could provide support are estimated to be between $38,000, which is close to the short-term holder realized price for bitcoin at $38,307, and $36,000,” the report stated.

Bitfinex analysts tracked metrics for unrealized and realized profit and loss for short-term bitcoin holders, identifying that over half of the profits accumulated by this cohort have been wiped out. “Many holders, especially those who acquired bitcoin less than a month ago, are now exiting the market at a loss,” the analysts added.

Short-term BTC -4.18% holders’ realized and unrealized profit has declined. Image: CryptoQuant.

Market volatility causes spike in liquidations

As a result of the heightened market volatility, total liquidations of leveraged crypto positions in the past 24 hours have surpassed $330 million.

The majority of the liquidations involved long positions, leading to a loss of over $290 million, while short positions contributed only around $39 million to the total liquidations, according to Coinglass data.

The bitcoin price has dropped more than 4.5% in the past 24 hours, falling below the $39,000 mark. The world’s largest cryptocurrency by market capitalization is now trading at $38,894 as of 5.17 a.m. ET, according to The Block’s Prices Page.

The price of bitcoin has fallen below the $39,000 level. Image: The Block.

Source