Bitcoin fell for the fifth day in a row, putting it on track for its worst month in more than three years and leading a full-fledged withdrawal from digital-asset markets.
Bitcoin struggled to retain $40,000 support and started a brief freefall below its substantial 200-day moving average, which some are calling a “capitulation bottom.”
BTC/USD sank to new lows of $32,200 on Wednesday, according to data from TradingView.
As reports of a new Chinese crackdown emerged, coupled with a stock market meltdown and a strengthening US dollar, selling pressure grew much stronger.
While the drop in dollar terms was modest by Bitcoin’s standards, it created havoc among speculative traders, with $2.7 billion in liquidations in a single hour. The total amount of money liquidated in just 24 hours was $6.5 billion.
Long leveraged traders’ liquidation spiked on the move down in the past hour, according to Philip Swift, founder of analytics resource LookIntoBitcoin.
Short-term BTC investors are now at a loss, according to Rafael Schultze-Kraft, co-founder of fellow research resource Glassnode, who also added that current prices mark a line in the sand for short-term BTC investors.
He cited Glassnode’s Short Term Holder MVRV measure, which examines the price of unspent transaction outputs that are less than 155 days old.
“Short-term holders are now in the red as STH-MVRV falls below the neutral line. “It’s at a critical level,” he said.
Altcoins are following suit
Bitcoin was attempting to establish a floor above $37,000 at the time of publishing, despite the uncertain conditions.
The situation was similar on altcoins, with many major-cap tokens losing nearly 30% on the day.
Telcoin (TEL) and Shiba Inu (SHIB), both of which had previously seen huge gains, were among the biggest losers.
Meanwhile, Ether (ETH) briefly fell below $2,000 before regaining its footing.
The fact that Bitcoin’s market capitalization supremacy increased from under 40% to nearly 45 percent was a silver lining for bulls today.