Bitcoin price fell below $58,000 as various factors led to losses

The Bitcoin price has seen some significant declines in recent days, falling from nearly $65,000 to less than $58,000 as the confluence of several variables pushed the cryptocurrency's price down.

The digital currency, the world's largest by total market value, fell to around $57,850 today, according to Coinbase data from TradingView.

As additional Coinbase numbers from TradingView show, the cryptocurrency fell to this level after rising above $64,800 on August 25.

The digital asset has since recovered some of these losses and is trading at just under $59,100 at the time of writing.

“Strong” technical resistance

After hitting its highest value in around three weeks on August 25, Bitcoin may have seen a price reversal and a downward trend as the price encountered significant technical resistance near the $64,000 mark, according to Julio Moreno, head of research at CryptoQuant.

“The selling may have been triggered by technical factors as the price encountered resistance at around $64,000, which is the on-chain trader's realized price, an important technical level,” he explained.

The following chart shows this on-chain realized price along with the corresponding profit or loss:

Robust foreign exchange inflows

On August 26, when the Bitcoin price was already plummeting, a significant portion of the cryptocurrency flowed to spot exchanges, according to additional data from CryptoQuant.

The significant movement of the digital currency on these marketplaces, which occurred again on August 27, signaled selling pressure, Moreno noted.

The following graphic illustrates these movements:

These developments helped accelerate the downward movement of Bitcoin's price, he claimed.

Long press

The decline in Bitcoin price led to a “long squeeze,” meaning many traders had to close their long positions when the cryptocurrency lost value.

Steven Lubka, Head of Swan Private at Swan Bitcoin, cited this as one of the main reasons for the significant decline the digital asset has suffered in recent days, clarifying this via email.

The following graph illustrates the sharp increase in liquidations on August 27:

Nvidia results

Another important factor that analysts say influenced Bitcoin's recent price movement was the market's reaction to the recent financial results of chipmaker Nvidia Corporation, which trades under the ticker symbol NVDA.

Tim Enneking, Managing Partner of Psalion, commented on these results and their implications for a broad range of risky assets.

“As for today's specific performance, it correlates with fiat markets and Nvidia's over-inflated revenue and earnings expectations – which in all cases exceeded forecasts but did not break the upper limits of various analysts' ranges,” he explained by email.

“At the time of writing, the price is down 8% in after-hours trading and has dragged down all risk-on markets over the past 24 hours because people were afraid of exactly these outcomes,” Enneking added.

Disclosure: I own some Bitcoins, Bitcoin Cash, Litecoin, Ether, EOS and SOL.