Every uptrend witnesses periodic bouts of profit-booking as short-term traders tend to unwind positions either on adverse news or at critical technical resistance levels. This occurred with Bitcoin (BTC) today as the price momentarily dropped below $48,000 and traders scrambled to close or top up positions before being liquidated.
Elon Musk’s tweet on Feb. 20 that said Bitcoin prices “seem high” and the U.S. Treasury Secretary Janet Yellen’s warning today on Bitcoin being “extremely inefficient” could have dampened short-term sentiment.
Daily cryptocurrency market performance. Source: Coin360
Another possible factor that may have exacerbated the fall could have been the unwinding of excessively leveraged long positions. About $1.64 billion worth of Bitcoin futures positions were liquidated during today’s sharp pullback.
However, derivatives data for Bitcoin futures do not show any negative development, as highlighted by Cointelegraph Markets analyst Marcel Pechman.
Let’s analyze the charts of the top-10 cryptocurrencies to spot the critical levels on the upside and the key support