Bitcoin (BTC) priceThe decline in the cryptocurrency market was received negatively by the cryptocurrency market, as it often does, and made a major correction for the second day in a row.
Bitcoin unexpectedly corrected about 47% from its all-time high of $69,000. Despite the opinion of many investors who see this hard and wide correction phase as a buying opportunity, analysts think it may not be the right time to buy.
Bitcoin futures open interest remains high despite a heavy correction last week. Historical trends suggest that the correction is not yet over unless Bitcoin OI turns neutral or turns negative.
Crazy part is open interest still hasn’t flushed pic.twitter.com/ivkPiYSTzQ
— Will Clemente (@WClementeIII) January 21, 2022
On the technical chart, Bitcoin closed a daily close below the $36.5000 levels. This resulted in the lowest daily close since July 25, 2021. BTC Ninja stated that Bitcoin closed below 0.789 FIB, so we can expect more bittersweet picture as Bitcoin drops to $33,000 and even lower.
#Bitcoin closed the daily at $36,456. Lowest daily close since July 25th, 2021. It closed below the .786, therefore, a higher probability that we might see the .886 at $33k. #BTC $BTC pic.twitter.com/IHBA7Bj2xw
— ₿TC Ninja ⚡ (@mario80503) January 22, 2022
Bitcoin Miner Capitulation Coming?
Bitcoin miners continue to accumulate heavily so far in this latest correction. The data shows that miners have accumulated over 6,000 BTC in the past two weeks as BTC corrected from $45,000 to $38,000.
Data from @cryptoquant_com shows that #Bitcoin miners have added more than 6,000 $BTC to their wallets in the past two weeks while #BTC went from $45,000 to $38,000. pic.twitter.com/VOkihaybpe
— Ali Martinez (@ali_charts) January 21, 2022
However, it is currently trading at a level very close to $34,000, which is the BTC miner production cost. Now, BTC price If further corrections continue, we may see heavy selling and capitulations from Bitcoin miners. Last week, BTC was trading around $42.00, while a well-known crypto analyst @venturefounder noted:
“#Bitcoin’s worst ever declines were due to miners’ capitulation (December 2018, March 2020), with Bitcoin falling below production costs, at risk for miner capitulation, at $30,000 in May, at risk for miner capitulation. The current production cost is 34 thousand dollars.”
Bitcoin’s Relationship With Nasdaq Hits All-Time High
It is now a known fact that the current correction in crypto is following the broader sell-off in the US stock market. Popular market analyst Will Clemente said:
“This week Bitcoin’s correlation with the Nasdaq hit an all-time high. Without a catalyst to cause BTC-specific flows, for now, it tracks risk aversion behavior from high beta stocks.”
On the other hand, the S&P 500 fell below the 200-DMA. This could lead to further liquidations in the crypto space, thus a possible Ripple effect can be seen in the crypto market as well.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.