Bitcoin (BTC) has suddenly fallen below $47,000 on Dec. 4, losing nearly 20% in the past 24 hours. This makes this the biggest one-day drop since May 15 when Bitcoin price momentarily came down to nearly $33,000.
The market price of BTC fell down 26.4% from week-long support of $57,206 to go down to $42,268 before recovering back to the $45k mark. According to Coinglass data, the Bitcoin market experienced $1.3 billion in total liquidations in the past hour, with $735 million liquidated in BTC longs on this drop.
As a result, Bitcoin’s bear market cancels out the two-month long bull market since Sept. 29, where BTC soared over 63% to attain an all-time high of $67,602 by Nov. 8.
Another reason for Bitcoin’s two-month low bearish streak can also be attributed to mainstream resistance from United States regulators that have invited the CEOs of prominent crypto exchanges including FTX and Binance US for a hearing on crypto-assets.
On the other hand, some believe that the price of Bitcoin can now stabilize following the decline. Despite concerns surrounding volatility and non-compliance with traditional financial practices, Bitcoin continues to rise as a viable asset for jurisdictions with unstable economies.
Following the footsteps of El Salvador, the government of Zimbabwe is considering the mainstream use of Bitcoin. As Cointelegraph reported, retired Brigadier Colonel Charles Wekwete, the permanent secretary and head of the office of the president and cabinet’s e-government technology unit, confirmed that discussions with businesses are already underway.
According to Wekwete, the authorities intend to develop regulations to protect consumers against financial threats such as unregistered cross-border transfers, externalization of money and money laundering.
BTC buying activity remains weak despite several oversold signals on the charts. This reduces the chance of a significant price increase heading into January, especially given the loss of upside momentum on the weekly and monthly charts.
Trading volume of the No.1 cryptocurrency by market capitalization across major centralized exchanges, however, continued to drop.
The majority of the crypto market was also in red: Ether was down by more than 5% to around $4,000. The bearish market performance occurred as U.S. stocks fell and the dollar index (DXY), which tracks the greenback’s value against major fiat currencies, rose by 0.28%.
The short-term downtrend over the past month remains in effect, which could limit further upside beyond $50,000-$60,000.
The cryptocurrency is down about 4% over the past 24 hours, although support around the 200-day moving average (currently at $46,500) could stabilize the current pullback.
BTC buying activity remains weak despite several oversold signals on the charts. That reduces the chance of a significant price increase heading into January, especially given the loss of upside momentum on the weekly and monthly charts.