Key Takeaways:
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US Regional Bank Stress hit markets as auto sector bankruptcies exposed risky loans, sending financial stock prices down.
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Bitcoin fell below the 200-day SMA, dropping to $104,500 amid $1.2 billion in crypto liquidity.
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Analysts view $88,000 as the next significant support level for BTC, unless $104,000 holds.
Bitcoin (BTC) dropped to $104,000 in a second Black Friday event as signs of credit stress in US regional banks triggered a fresh wave of risk aversion across the crypto market.
Bitcoin extends losses as equities slide
Bitcoin prices began to decline during New York trading hours on Thursday as investors turned defensive, with equities slipping, holdings in bonds and Gold reaches a fresh all-time high.
It comes after concerns emerged over financial turmoil in the US, with banks in the region under pressure due to exposure to two losses in the auto sector.
Related: Investors are getting better at spotting bad Bitcoin Treasurys: David Bailey
First Brands Group, an Ohio-based auto parts supplier with $10 billion in liabilities, and Tricolor Holdings, a subprime auto lender with $1 billion in debt, filed for bankruptcy in late September.
These failures exposed risky lending practices, especially in the private credit markets, prompting fears of collapse.
Zions stock fell 13% after revealing it would take a $50 million loss in the third quarter on two loans from the California division. Western Alliance’s stock fell 11% after it initiated a lawsuit alleging fraud by Cantor Group V, LLC.
As a result, the S&P 500 fell 0.63% to close the day at 6,629.07 on Thursday, while the NASDAQ Composite Index declined 107 points (-0.47%). The Dow Jones index lost 0.65% to close the trading day on Thursday at 45,952.24.
This panic rippled through the crypto market, pushing bitcoin to an intraday low of $104,500, with total crypto market capitalization falling 5% to $3.58 trillion, according to data from Cointelegraph Markets Pro and TradingView.
Bitcoin eliminates liquidity by falling below $105,000
Friday’s bitcoin selloff extended the divergence since October 6 All-time high $126,000 at 16.5% and accompanied by massive liquidity across the derivatives market.
Related: Bitcoin and whales to blame for BTC’s painful rise: Willy Woo
More than $935.2 million in long positions were liquid, with the Bitcoin account accounting for $317.8 million of the total. Ether (Eth) followed by $196.3 million in long liquid.
Across the board, a total of $1.19 billion was wiped off the market in short and long positions, as shown in the figure below.
“Another day with lots of declines across the board. It doesn’t even last long as the market goes down,” said Trader Daan Crypto trades on Friday, adding:
“This is exactly what happens after most big flushes. Traders cut themselves while trying to recover what was lost.”
Additional data from Coinglass showed Bitcoin price eating away at liquidity around $105,000, with multiple orders still sitting at $103,500 as shown in the chart below.
This indicates that the price of Bitcoin may fall further to sweep the liquidity within this range before staging a sustained recovery.
How low is the price of bitcoin?
Bitcoin’s fall below $105,000 Friday saw it lose key support areas, including the 200-day SMA at $107,520.
This left traders wondering how low the price of BTC could go before it found its footing.
“There is no upside in sight for $BTC at the moment,” the analyst said Block_diversity in an x post.
An accompanying chart highlights key levels to watch on the daily chart, including Last Friday on Binance around $101,000, and the demand zones around $95,000 and $88,000.
“These are the open targets, unless $BTCStarts gets support at $107.4k.”
“$104k is the HTF level that matters most here,” said Fellow analyst Sykodelic added that they expect this area to hold as the daily RSI is at its lowest level since $74,000 below.
“This week’s close is going to be very important.”
Count Cointelegraph reported.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.
