Bitcoin’s (BTC-USD) price has dropped below $50,000 on early Friday, sending the whole crypto sector into the red
The price continued to decline below 50K on early Friday morning and is changing hands around $49K as of writing, which represents a drop of more than 8% over the past 24 hours. The price drop follows news in the U.S. hours that President Joe Biden was said to propose increasing tax for the wealthy on capital gains by as much as 100%.
Statistics from Bybt.com show that nearly $500 million worth of bitcoin longs have been liquidated over the past one hour and a half due to the price dump. Overall, around $1.6 billion in crypto futures positions have been liquidated during the same time.
Bitcoin has slipped below the 50-day moving average support that it held sacrosanct through this rally. Here are some levels to watch for.
Where are we going next?
In my opinion, the bull run has yet to end. Institutional investors are taking advantage of tax the FUD while uncertainty is high. Recently, the 3.618 Fibonacci was rejected on $64.2K. I think if we were to break the 2.618 Fib ($47,259), that could very well signal the end of this bull run. If we manage to hold this support zone and gain back some bullish momentum, the next target to look for would be the last rejection mark. Once we push through this resistance zone, we might have some steam left to be able to hit the $74K mark.
This is, in my opinion, where the real Altseason starts, and where the momentum on BTC starts to die down, signaling the end of the bull run.
Investing can and should be fun. It can be educational, informative, and rewarding. By taking a disciplined approach and using diversification, buy-and-hold, and dollar-cost averaging strategies, you may find investing rewarding even in the worst of times. Be aware of your emotions, FOMO and FUD.
If you’re panicking right now, maybe reconsider how much you have invested or what coins you’re invested in. This is a volatile space and your mental health is more important than anything else, especially controlling your emotions. Take care of yourself, stay hydrated, check your posture, and keep a big picture perspective.