Bitcoin & Crypto Selloff: Liquidations, Extreme Fear, Eyes on MicroStrategy, and Possible Support Levels

cryptonews.com:

Bitcoin (BTC) and the broader crypto market went into a sharp selloff over the past day, led lower by a de-pegging of the partially BTC-backed stablecoin terraUSD (UST) and a falling risk sentiment globally.

At the time of writing (10:30 UTC), BTC was down by 5.5% over the past 24 hours to USD 31,512, having trimmed some of its losses from Monday when it dipped as low as USD 29,730. At the same time, ethereum (ETH) was down 2.2% for the past 24 hours to USD 2,384 – also up from its Monday low of USD 2,200.

The selling led to massive liquidations of leveraged bitcoin long positions across exchanges, with about USD 193m liquidated in the 12 hours from noon to midnight UTC time on Monday.

The liquidations in crypto came as stocks globally also went into deep red territory, with the US S&P 500 index losing 3.2% on Monday and the technology-heavy Nasdaq index shedding 4.3%.

Among the more notable developments over the past 24 hours was seen by the UST stablecoin, which lost its US dollar peg and fell to as low as USD 0.67 before its recovery started. The event forced the team behind the stablecoin to act and lend out BTC to a trading firm that is likely to have sold it to defend the UST peg.

The selling in crypto over the past day has brought the so-called Crypto Fear and Greed Index, which measures sentiment from across the crypto market, to ‘Extreme Fear’ with a reading of 10.

Throughout its history, dating back to early 2018, the index has only been below 10 on a few occasions. Among these was the Covid-19-related crash in March 2020, and the final capitulation of the 2018 bear market in November that year.

Meanwhile, bitcoin bull Michael Saylor’s firm MicroStrategy is also in the news today, after reports that the company's