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Bitcoin Price Crash Key Chart

Navigating Turbulent Times: Key Insights and Crucial Charts Amidst the Bitcoin Price Drop

Bitcoin Magazine Pro

Aug 5

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Weekly News Insight

GM. Bitcoin's price is down 15.4% over the past 24 hours as market panic continues into the new week. Morgan Stanley will begin offering Bitcoin ETFs to wealth clients. BM Pro analysts identified a critical chart to monitor during the price drop.

Bitcoin price has continued to fall over the weekend and into the new week. Price has now dropped back down to levels previously seen in February this year around the time of the ETF launches.

$BTC is currently down -15.4% over the past 24 hours and -26% over the past week.

Figure 1: Bitcoin past 24-hour price performance.

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News You Need to Know

Morgan Stanley will start offering Bitcoin ETF’s to wealth clients this week.
The Strategic Bitcoin Reserve bill has now been officially introduced.
Microstrategy bull, Benchmark, doubles down on the stock despite revenue miss.

The Big Story

Bitcoin Price Tumbles Amid Markets Panic

The price of Bitcoin continued to tumble over the weekend to under $51,000. These price levels have not been seen since February this year.

The drop came amid wider market concerns about Japan, with the Nikkei falling more than 6%. This follows the Bank of Japan’s move last week to increase its benchmark interest rate, which sent the Japanese yen higher and the Nikkei stock index lower.

That, in turn, has sent shockwaves across global markets as the Federal Reserve is yet to change rates.

That wider panic has impacted Bitcoin prices. Market panic results in the need to liquidate assets, and Bitcoin is not immune from this in the short term.

Due to the market sell-off, $223M worth of Bitcoin long liquidations have occurred in just over 24 hours in the derivatives markets.

Key Chart

Each week, our BM Pro Analysts hand-pick a must-see chart for you. This week:

Bitcoin Funding Rates

Figure 2: Bitcoin Funding Rates.

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What the chart shows:

Coin margined funding rates at Bybit exchange.
Those funding rates are currently extremely negative.

Why this matters:

Negative funding rates in Bitcoin derivatives trading indicate that short positions pay long positions, suggesting a bearish sentiment in the derivatives market. In other words, there are high levels of confidence among many traders that the price of Bitcoin will go down further. Therefore, those short traders are prepared to pay a premium for their short positions.
Coin-margined negative funding can also occur when traders are hedging their long positions using Bitcoin as collateral. This is also borne out of a concern / expectation that Bitcoin price may continue to drop further.

What’s happening now:

These funding rates are stretching extremely negative right now, which highlights the level of concern and panic in the Bitcoin derivatives markets as the price drops.
However, it is worth noting that in Bitcoin bull markets, such extreme levels of negative funding have typically marked major local bottoms.
This indicates that Bitcoin price may soon be approaching a bottom in price before reversing to the upside.
Whether it is a short-term bounce or the start of a major reversal will depend on other factors that we will monitor and share with paying members of Bitcoin Magazine Pro.

The Big Context

While $BTC may be tumbling in the short term, it’s long-term case for existing continues to build.

Latest data shows that the size of the Federal Reserve debt now stands at over $35 trillion.

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Stay Informed with Bitcoin Magazine Pro

For more detailed Bitcoin analysis and to access advanced features like live chats, personalized indicator alerts, and in-depth industry reports, check out Bitcoin Magazine Pro.

You can subscribe to Bitcoin Magazine Pro here. Right now there is a 30-day free trial, but that will be ending soon.

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The Bitcoin Magazine Pro Team.

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Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.