BTC/USD: Bitcoin Bulls Meet Resistance close to $31,000, and Long Positions Are Liquidated

Following a robust rally since the beginning of the year, BTC encountered significant resistance at $31,000 and fell below $28,000 prior to the weekend. Similarly to Bitcoin, Ethereum encountered significant resistance near the $2,100 mark, declining by more than 12 percent in the past week. If the bull market of 2023 is to persist, it may have to overcome some obstacles.

Aside from the two largest cryptocurrencies, the total market capitalization of the crypto space has fallen to below $1.15tn, despite having crested at around $1.26tn.

market capitalization this month. In a single day last week, long positions worth $253 million were liquidated as cryptocurrency prices plummeted. April exchange volumes are anticipated to be significantly lower than the $984bn recorded in March, according to market analysts.

What is the cause of the Bitcoin decline?

The Federal Reserve's policy is one of the primary causes of the sell-off. At their most recent meeting, officials alluded to the possibility of another quarter-point increase in interest rates in May. In the absence of a reversal, April will be the first month of 2023 in which the BTC price recorded a net decline.

A second factor is that the crypto market's rally in 2023 is viewed by some as premature and is being tested by those with more pessimistic market outlooks. The publication of the UK inflation report, which showed that it remained extremely high, appears to have also coincided with the beginning of the sell-off. To date, however, 2023 appears more prospective than 2022 for the cryptocurrency market.

Regarding Bitcoin

Bitcoin is the first decentralised digital currency; it was created in 2008 by an unidentified individual or group using the alias Satoshi Nakamoto. It operates on a decentralized peer-to-peer network, meaning that transactions can occur directly between users without the need for intermediaries like banks. Bitcoin employs cryptography to secure transactions and regulate the issuance of new units of currency. Transactions are recorded on a public ledger known as the blockchain, allowing anyone to confirm the legitimacy of a transaction and the ownership of bitcoins.The entire supply of bitcoins is capped at 21 million, which is anticipated to be exhausted by the year 2140. Bitcoin's price has experienced numerous boom and bust cycles over the years, as it is extremely volatile.