Bitcoin price remained on edge on Thursday, Dec. 18, continuing a consolidation that has been going on in the past few weeks. BTC was trading at $87,400, down sharply from the year-to-date high of $126,000.
Crypto Analyst Explains the Ongoing Bitcoin Price Crash
A crypto analyst has identified the top two reasons for the BTC price’s deep sell-off. In a statement, he noted that China’s authorities are scrutinizing the sector as they target Bitcoin miners. He pointed to a recent report showing that miners in the Xinjiang region reduced their operations by 100 EH/s. This is a notable factor as China controls about 50% of the hashrate.
As a result, the analyst believes this action has led to miner capitulation amid the ongoing crackdown. That’s because, when miners are forced to shut down, their revenue stops, and they liquidate their equipment and Bitcoin holdings.
The analyst also noted that Asian whales have been aggressively selling their coins over the past few months. Indeed, recent data shows that selling among whales who have held it for a long time has accelerated.
Meanwhile, some analysts have blamed the ongoing Bitcoin price weakness to large companies like Wintermute and Binance. They point to on-chain data showing that these entities have continued to move thousands of Bitcoins to exchanges in the past few weeks.
Additionally, crypto traders have reduced their leverage over the past few months to mitigate liquidation risk. Data compiled by CoinGlass shows that the futures open interest has dropped to $125 billion from the year-to-date high of over $255 billion.
Bitcoin’s futures open interest has dropped to $57 billion, down significantly from $94 billion in October. Declining open interest is often a sign of waning investor demand.
Bitcoin Price Technical Analysis
The daily chart shows that the BTC price has pulled back in the past few months, moving from a record high of $126,000 to the current $87,245. It has formed a death cross pattern, as the 50-day and 200-day moving averages crossed.
The coin is now forming a bearish flag pattern, consisting of a vertical line and an ascending channel. It also sits below the Supertrend indicator. Therefore, the coin will likely continue to fall, with the next key support at $80,000.
A bullish breakout will be confirmed if the coin moves above the important resistance level at $94,570. A move above that level will raise the odds of Bitcoin moving back above the critical $100,000 resistance level.
