Bitcoin at $42,500: What’s Causing Extreme Selling Pressure Over the Crypto?

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Just a few days before, the Bitcoin price marked highs close to $49,000, fueled by the approval of all the spot BTC ETF applications. Unfortunately, the bullish sentiments soon flipped over as Vanguard initiated a ‘bocking process’ for thousands of its customers. This caused a massive drop of over 12%, forming interim lows close to $41,500 and creating huge panic within the crypto space.

During the previous day’s trade, the crypto space witnessed an acute drop in the value of the top cryptos, including BTC, ETH, XRP, SOL, etc., whipping over $100 billion from the markets. While the drop in BTC prices is quite unclear, one of the reasons could be crypto market liquidations.

As per the data from Coinglass, over 101,000 holders liquidated their assets, triggering $338 million worth of market-long liquidations for the second time in 2024. Has the ETF hype cooled down? Will BTC prices continue to maintain a descending trend?

The short-term projections do flash bearish signals for the BTC price, but in the long term, a major pullback is feared to hinder the progress of the rally. In the long term, the technicals are about to flash bearish signals as the RSI and MACD are closer to undergoing a bearish divergence. With this, a fresh descending trend may begin, with the price targets being the lower ascending trend line.

However, the token has been holding interim support at $41,184 since the first week of December. Therefore, until the price sustains above these levels, the bullish scenario cannot be invalidated. Now that the BTC price has dropped over 10% in just a couple of days, it appears that the Bitcoin ETF still needs to be priced in. With the Bitcoin halving fast approaching, it is considered the ‘buy the dip’ moment, which may soon be filled.