Bitcoin faced a more than 7% drop on Tuesday morning, leading a market-wide downturn that saw altcoins plummet deeper into correction zones. The price hit a low of $62,438, hinting at possible further declines towards the $60k mark.

BTC Nears Crucial Level as Altcoins Suffer

As the leading cryptocurrency struggled, the downturn extended to altcoins like Ethereum, Solana, BNB, Cardano, and Avalanche, all experiencing double-digit losses. ETH fell to $3,200, SOL to $172, BNB to $502, Cardano to $0.59, and Avalanche to $55.

According to data from Coinglass, over 242,841 traders were liquidated in the past 24 hours, with total liquidations surpassing $651 million. Long positions took the hardest hit at over $538 million, while shorts amounted to $113 million. BTC accounted for over $190 million in liquidated long positions, and ETH over $126 million.

The largest single liquidation happened on the OKX exchange involving the BTC/USDT-SWAP, totaling $12.25 million. Separately, a significant sell-off of 400 BTC on BitMEX caused Bitcoin’s price to drop to $8,900.

Cryptocurrency analyst Ali suggested that BTC might dip to support levels at $56k or $51k, with $61,100 being a critical support level currently.

“Some of the key Bitcoin support levels to watch are $61,100, $56,685, and $51,530. On the other hand, critical resistance points for $BTC stand at $66,990 and $72,880,” Ali shared on X on Tuesday.

Despite a recent surge to an all-time high of $73,737 lifting Bitcoin’s market cap above $1.4 trillion, today’s declines have pushed BTC to 10th place with a market cap of $1.23 trillion. Data indicates that Silver holds the eighth position with $1.41 trillion, and Meta ranks ninth with $1.26 trillion.

Summary:

Bitcoin witnessed a 7% decline to $62k, triggering a market-wide slump dragging down altcoins like Ethereum, Solana, BNB, Cardano, and Avalanche. The downturn resulted in significant liquidations and raised concerns among traders and analysts regarding potential support and resistance levels for BTC.

FAQ

What caused the drop in Bitcoin and altcoin prices?

The exact reasons behind the decline are often difficult to pinpoint in the volatile cryptocurrency market. However, factors such as market sentiment, regulatory changes, macroeconomic events, and profit-taking by investors can all contribute to price drops.

Is this drop in prices temporary or the start of a more prolonged downturn?

It is challenging to predict the future movements of cryptocurrency prices accurately. Traders and analysts closely monitor technical indicators, market trends, and external factors to make informed forecasts, but the market remains highly unpredictable.

How can investors protect themselves during market downturns like this?

Investors can employ risk management strategies such as diversification, setting stop-loss orders, and staying informed about market developments. Additionally, having a long-term investment perspective and not making impulsive decisions based on short-term price movements can help navigate volatile market conditions.