Over the last day, the global sentiment towards cryptocurrencies has completely shifted due to a substantial dip in value and billions in liquidations.
The value of Bitcoin [BTC] has also taken a hit, witnessing a steep decline—an atypical scenario for the market.
The cause behind Bitcoin’s descent
The probable factor for this market volatility and significant price drop across digital currencies is the trade conflict set off by U.S. President Donald Trump.
On February 2nd, Trump shared on X (previously known as Twitter) that he had enforced tariffs on Mexico, Canada, and China, leading to a general market decline.
Optimistic outlook among traders and stakeholders
Notwithstanding, traders and stakeholders displayed optimism regarding BTC as they continued to amass and invest in long positions, as per findings from Coinglass and Hyblock’s on-chain analytics reported by CryptoCrypto.
Coinglass’s data on inflow/outflow highlighted that since the onset of the price drop, there has been an outflow of a substantial $677 million worth of BTC from exchanges.
This notable outflow amidst the current struggling market hints at potential accumulation by large investors, stakeholders, and long-term holders, which might generate buying pressure and propel a further upward trend.
Simultaneously, Hyblock disclosed that while BTC’s value trended downwards over the past day, worldwide traders increased their long positions.
An estimated 67% of accounts took up long positions, indicating a promising outlook for the primary cryptocurrency.
Combining these on-chain statistics, BTC appears to signal an excellent buying opportunity.
Bitcoin’s price performance and critical thresholds
BTC has notably adhered to the critical support level of $91,500. Nonetheless, this marks the eighth time the asset has tested this level, potentially diminishing its resilience.
Considering past patterns, repeated tests of support or resistance could lead to either a breakdown or a breakthrough.
The ongoing price movements and market sentiment imply that as long as BTC remains above the $92,500 mark, it will likely sustain a positive trend.
However, failing to uphold this threshold and closing a daily candle below $91,000 could bring about a considerable 20% drop, possibly falling to the $74,000 level.
On the bright side, despite significant price oscillations, BTC has managed to stay above the 200 Exponential Moving Average (EMA), indicating an upward trajectory.