Over the past 24 hours, Bitcoin has witnessed liquidations exceeding $100 million in value, sparking concerns of a potential pullback towards the $50,000 threshold.
Bitcoin (BTC) liquidations surged to $100.4 million, predominantly from leveraged long positions totaling over $86 million, as reported by CoinGlass.
The liquidation event followed three consecutive days of negative market activity, dragging Bitcoin’s price from a peak of over $62,000 on July 2 to a low of $57,043 by 9:22 am UT on July 4, according to CoinMarketCap.
Although Bitcoin rebounded to trade above $57,800 by 9:40 am UTC, it still showed a daily decrease of more than 4.5% on the charts.
Monitoring Bitcoin’s movement around key psychological levels such as $60,000 remains crucial in gauging the progress of the current cycle, notably marked by the introduction of the first spot Bitcoin exchange-traded funds (ETFs).
In a significant development, Bitcoin fell below the average realized buying price of spot Bitcoin ETF buyers, dipping to $57,979, which analysts consider a pivotal support level for BTC.
Despite this decline, ETF buyers refrained from panic selling, with net total outflows amounting to just $20.5 million on July 3, primarily driven by $27 million in outflows from Grayscale’s ETF, according to Farside Investors.
However, concerns linger that ETF panic selling could ensue post the Fourth of July holiday in the United States, the world’s largest economy.
Additional selling pressure may arise from the imminent Mt. Gox repayments expected in early July, involving the distribution of over $9.4 billion worth of Bitcoin among 127,000 creditors who have awaited recovery for more than a decade.
Following the recent three-day downturn, Bitcoin also lost its 200-day trend line for the first time in ten months, potentially delaying a breakout until it surpasses the downtrend that began in early June, as noted by crypto analyst Rekt Capital.
Nevertheless, some technical chart analysts speculate that the recent price drop could simply be a shakeout — a sudden decline followed by a swift recovery, a sentiment echoed by Bitcoin investor Elja Boom.
Yet, caution prevails as analysts at 10x Research warn of Bitcoin possibly revisiting the $50,000 level due to accelerating sell orders.
For more insights, visit the latest issue of the magazine: “Could a financial crisis halt crypto’s bull run?”