Bitcoin (BTC) price falls to sub-42K levels; crypto market sees $800 million in liquidation

The crypto market saw its first major liquidation event in 2022 as the majority of the crypto market bled in double digits. Bitcoin fell below $43K support to trade in sub-$42k levels and reached a new 3-month low of $42,761. Ether (ETH) lost $3,500 support and fell to a monthly low of $3,432.

The crypto market bloodbath wiped out nearly $300 billion from the crypto market cap and saw $800 million worth of leveraged positions getting liquidated. Bitcoin saw the largest share of total liquidation with $36.91 million followed by Ether at $20.88 million and Solana (SOL) at $1.88 million.

The market sentiment has turned red with the Fear and Greed Index indicating extreme fear in the market. Social media was also dominated by bearish sentiments as “dip” became the top crypto word for the day. The selling pressure is considerably high but analysts belive it is also the perfect opportunity to buy the dip.

Bitcoin could retest $41K before a bounce-back

Bitcoin price dip currently coincides with the gold market which has registered record lows in the recent past. With the Omicron variant already showing its impact across nations, BTC is expected to repeat last year’s feat. Even last year BTC started off slowly and showed high correlations with the gold and S&P 500 index, but just within months, Bitcoin and cryptocurrencies broke out to record highs which turned their correlation with the traditional market to negative.

Market analysts belive Bitcoin wouldn’t stay at the current levels for long and could either see a rise to $47k or retest its December lows of $41,762 before making a bounce back.

The top cryptocurrency is currently trying to conquer $43k as support as it trades around $43,100 at the time of writing. The veteran traders were not necessarily surprised by a 10% market decline as they consider upto 30% pullback in the bull market as a natural market cycle to move to new highs.