If Bitcoin manages to swiftly recover from its recent drop to $71,000 on June 6, it will trigger the liquidation of over a billion dollars worth of short positions.
Bitcoin (BTC) experienced a 3.33% decline on June 7, falling to $68,507 before bouncing back slightly above the crucial level of $69,000. This drop occurred amidst broader macroeconomic uncertainty brought about by the United States Employment Situation Summary Report, which revealed higher job growth than anticipated in May.
In addition to Bitcoin’s price decrease, Ether (ETH) also saw a 3.58% drop over 24 hours, while various altcoins like Solana’s (SOL), Dogecoin (DOGE), and Pepe (PEPE) suffered declines of 5.61%, 8.70%, and 9.99% respectively, according to CoinMarketCap.
The market downturn resulted in a total wipeout of $409.51 million in short and long positions, as reported by CoinGlass. Out of this amount, $56.71 million were long positions in Bitcoin.
Two days prior to the decline in Bitcoin’s price, it traded between $70,000 and $71,662 on June 5 and 6. Many traders were optimistic that it might approach its all-time high of $73,679.
However, the sentiment has shifted, with traders now skeptical about a quick rebound in Bitcoin’s price. If Bitcoin were to return to $71,000, approximately $1.38 billion in long positions would be liquidated, indicating that futures traders are anticipating further price drops.
Following a 19-day streak of positive inflows into Bitcoin exchange-traded funds (ETFs), investors have been wondering why Bitcoin has not surpassed its March all-time highs. Analysts have pointed out that various factors influence Bitcoin’s price, with ETFs not wielding enough influence.
Charles Edwards, founder of Capriole Investments, highlighted that while ETF flows are significant, they are not powerful enough to counterbalance the entire ecosystem’s selling pressure. Crypto trader Christopher Inks emphasized that the market comprises spot, futures, ETFs, and options.
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