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The leading cryptocurrencies, Bitcoin ($BTC), Ethereum ($ETH), and Ripple ($XRP) slip to multi-month lows on Thursday, erasing all gains since Donald Trump won the US presidential election in November 2024.
Bitcoin dropped to $60k during the early hours of Friday, while $ETH retested the $1,750 support level, with $XRP also declining to $1.11.
The three leading cryptocurrencies have undergone double-digit corrections, with no signs of a near-term rebound.
Bitcoin revisits the $60k low
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Bitcoin recorded a double-digit loss on Thursday after losing 10% of its value to revisit the $60k level for the first time since November 2024.
The bearish performance resulted in over $350 billion being wiped out from the broader cryptocurrency market within a few hours.
According to CoinGlass, the losses resulted in a $2.62 billion wipeout of leveraged positions. The largest single liquidation occurred on Binance, with an entity losing $12.02 million in the $BTC-USDT pair.
Long traders lost $2.14 billion since Thursday, while short traders suffered a $465 million liquidation during that period.
In line with the liquidations, the derivatives market Open Interest (OI) has dropped to $95.73 billion on Friday, extending a decline since the October 7 peak of $233.50 billion.
Furthermore, the long-to-short ratio is at 0.9594 over the last 24 hours, indicating more short positions compared to the long positions.
A key factor in $BTC’s bearish performance is the declining confidence among institutional investors.
US spot Bitcoin ETFs recorded an outflow of $258 million on Thursday, amounting to more than $500 million so far this month.
The outflow makes it three consecutive months in which outflows exceeded $6 billion.
Until market volatility subsides and leverage is further reduced, Bitcoin is likely to continue trading in line with risk assets rather than behaving as a defensive hedge.
Bitcoin could gain efficiency by tapping $72k
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The $BTC/USD 4-hour chart is bearish but inefficient due to the sharp drop recorded on Thursday.
Bitcoin has left an efficiency gap in the $72,900 region, and the bears could grab liquidity at that point before dipping lower.
At press time, Bitcoin is trading above $65,650, down 7.9% in the last 24 hours.
If the market ignores the efficiency level and continues its correction, $BTC could extend the decline toward the weekly support at $54,800.
The Relative Strength Index (RSI) reads 23 on the 4-hour chart, an oversold condition, indicating strong bearish momentum.
Additionally, the Moving Average Convergence Divergence (MACD) indicator showed a bearish crossover since January, which remains intact, further supporting the negative outlook.
However, following this massive correction, Bitcoin could reclaim higher levels in the near term.
If the recovery commences, $BTC could rally towards the $72k EPA level over the next few hours or days.