Why bitcoin and many crypto assets are falling

On Wednesday morning, rising U.S bond yields weighed heavily on bitcoin and many other crypto assets as they traded lower. Investors are reducing their appetite for risk, which has hit the most speculative sectors the hardest.

Government bonds, which are traditionally considered safe-haven investments, are also falling as yields rise. Even so, bitcoin’s spot trading volumes are at their lowest point in six months, despite the global market rout. The crypto market value is presently trading below $2 trillion with many altcoins posting negative returns for the day

Traders may have been hesitant to move because of the extended fearfulness in combination with the recent low volatility.

Based on data from Glassnode, realized bitcoin holders’ losses are still elevated and trending higher, as underwater holders are spending coins they acquired near the top of the market.

Realized losses are on average about 750 million dollars per day, similar to the capitulation lows of May – July 2021. The consistency of large loss realization events indicates a lack of confidence within the market; however, it also indicates a demand inflow for these spent coins.

In periods of sustained large losses, the bulls have to prove that there is sufficient demand support. It is more encouraging for bulls to see a decline in realized loss values, as it provides an early indicator of sell-side exhaustion.

Crypto investors have also recently exhibited some caution. The bitcoin futures market has a bearish bias in terms of leverage.

If BTC’s price rises, short traders, or those expecting a price decline, may have to unwind their positions. High volatility is likely if the unwind is rapid.

Retail investors, and most importantly, institutional investors, are in action on the part of the premier cryptocurrency, which has not been growing.

The bitcoin price remained below the pivotal level of $43K. The price even fell below the 100 hourly simple moving average and broke the $42K support level. The price is currently correcting higher after forming a low near $41.2K.

A potential resistance level is near $42,550 on the upside. In the key decline from the $43,800 swing high to the $41,288 low, it is near the 50% Fib retracement level.

Near the $42.8K level, the main resistance is forming. On the hourly chart of the BTC/USD pair, there is also a crucial bearish trend line emerging near $42.7K.

As long as the trend line resistance is broken, we could see steady increases above $43K.