Bitcoin price drops 12% in three days, triggering $1.8B in crypto liquidations
Bitcoin price has experienced a sharp decline, shedding 12% from its value over just three days, with a notable 7% drop on Monday, February 3, 2025, during the Asian session.
The cryptocurrency's price fell to $91,300, marking a significant break below the 50-day Exponential Moving Average (EMA), which stood at $98,500. This was followed by a partial recovery in the European session, pushing the price back to $95,000.
The plunge in Bitcoin's price coincided with broader market turmoil, sparked by U.S. President Donald Trump's announcement of new tariffs on imports from Mexico, Canada, and China. This news led to a massive $1.79 billion in liquidations across the crypto market within 24 hours, with long positions suffering the most at $1.57 billion in losses. The market's reaction underscores the sensitivity of cryptocurrencies to macroeconomic policy changes.
BTC price dynamics (November 2024 - January 2025). Source: TradingView.
Prior to this week's downturn, Bitcoin had been consolidating between $100,000 and $108,200 for several days in January, suggesting a period of stability or indecision in the market. However, the recent policy announcements disrupted this balance, triggering a rapid sell-off.
Bitcoin price outlook: Technical indicators resist price recovery
Technical indicators provide further insight into Bitcoin's current position. The daily Relative Strength Index (RSI) has not yet reached oversold levels, hinting at potential for further declines unless there's a significant reversal in market sentiment. Moreover, if Bitcoin's price extends by 2%, it will reach below the previous month's low of $89,000 and mark a third-month decline, painting a gloomy picture for near-term recovery prospects.
The resistance level at the 50-day EMA ($98,500) now acts as a critical threshold for any recovery attempts. Should Bitcoin fail to reclaim this level, it might indicate a longer-term bearish trend. Hence, the markets are keeping a close tab on bitcoin if its price can regain its footing or if further declines are on the horizon.
Long-term Bitcoin holders sold approximately 177,617 BTC over the past weeks. This significant sell-off by long-term investors led to increased market volatility in Bitcoin's price.
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