- Traders are watching closely for signs of another significant sell-off in Bitcoin.
- Bitcoin options indicate that traders are preparing for a possible decline to $70,000.
- This week, the cryptocurrency officially entered a bear market, having dropped more than 20% from its peak in January.
Crypto traders are concerned that the ongoing sell-off of Bitcoin could worsen now that the asset is in a technical bear market.
According to Deribit data cited by Bloomberg, the open interest for put options with a $70,000 strike price has surged to the second-highest level among all contracts expiring this Friday.
If Bitcoin were to reach this level, it would signal an additional 18% drop from current prices and a 35% decrease from its all-time high of over $109,000 in January.
Katie Stockton, a leading analyst and founder of Fairlead Strategists, stated to Business Insider, “Bitcoin has confirmed a short-term breakdown within the context of its long-term uptrend. We would not discount a test of secondary support near $73.8K (previous resistance from 2024) before the corrective phase completes.”
George Pavel, general manager of the trading platform NAGA, shares the perspective that Bitcoin might drop to $70,000, especially after it recently crossed the critical $90,000 resistance level.
“Should key support levels like USD 82,000 fail to hold, Bitcoin could decline further,” he mentioned in an email to Business Insider.
This week, Bitcoin has officially entered bear market territory, currently down roughly 21% from its all-time high of $109,350 recorded in January.
The coin was trading at about $85,821 on Thursday morning.
In the meantime, Bitcoin’s total market capitalization has fallen to $1.7 trillion, while its trading volume over the past 24 hours saw a 27% increase, according to CoinMarketCap data.
The recent sell-off seems to be a reaction to a broader risk-off sentiment in the markets, coupled with other elements that have shaken the confidence of crypto investors.
Spot Bitcoin ETFs experienced outflows exceeding $1.1 billion on Tuesday, based on Farside’s data, which has impacted Bitcoin’s price.
Additionally, heightened volatility and weaker sentiment have emerged following a substantial $1.5 billion theft from the crypto exchange ByBit last week, which analysts suggest could be one of the largest hacks in crypto history.
Pavel also believes that macroeconomic uncertainty and sluggish advancements in pro-crypto policies from the Trump administration may be contributing to the selling pressure.
“Unless there is a notable shift in market dynamics or a catalyst that reignites investor confidence, the downturn could persist for a while,” he stated.
