Bitcoin (BTC) Price Briefly Drops Below $65K Triggering Heavy Crypto Liquidation

by

As an experienced analyst, I believe that the recent dip in Bitcoin price, with heavy liquidation affecting mostly long traders, is a clear sign of heightened volatility and market uncertainty. The notable cash outflows from spot Bitcoin ETFs, especially Fidelity’s FBTC and Ark’s ARKB, further underscore this bearish trend.

As a cryptocurrency analyst, I’ve observed that Bitcoin (BTC) ended Monday with a long-legged Doji candlestick, signaling indecision in the market. When I woke up on Tuesday, the price outlook appeared bearish. During the early Asian session, BTC dipped as low as $64,000, but it has since found support around $65,600 during the London trading hours. The significant Bitcoin drop within the last 24 hours resulted in extensive crypto liquidation, primarily affecting long-position traders.

Based on information from CoinGlass’s market data, approximately $402 million out of the total $464 million in liquidated funds in the leveraged crypto market came from long traders. The increased volatility in the cryptocurrency market has led to a surge in interest from traders and investors in stablecoins. This is evident in the high daily trading volume of over $63 billion for USDT alone, which surpasses the combined daily trading volumes of Bitcoin and Ethereum.

Spot Bitcoin ETFs Cash Flows Signals More Pain Ahead

Based on Coinspeaker’s report, I’ve observed significant outflows from US-based Bitcoin spot exchange-traded funds (ETFs) in the past few days following the hawkish Federal Reserve meeting. Specifically, on Monday, these ETFs recorded a collective cash withdrawal amounting to approximately $145 million.

It’s intriguing to note that Grayscale’s GBTC experienced an inflow of just $3 million during Monday’s trading, while Fidelity’s FBTC and Ark’s ARKB saw significant outflows. Specifically, Fidelity’s FBTC had a net redemption of approximately $92 million, and Ark’s ARKB recorded total cash withdrawals amounting to around $50 million.

As a crypto investor, I’d put it this way: “Yesterday, the inflow of new funds into Bitcoin spot ETFs, with iShares Bitcoin Trust (NASDAQ: IBIT) being the frontrunner, came to a standstill. No fresh capital was injected into these ETFs.”

Based on my analysis as a researcher, I’ve observed a significant decrease in Bitcoin Cash inflows to exchanges, along with a reduction in the number of active addresses. This trend has led many traders to adopt a bearish stance in the short term.

What Next for BTC Price Action?

Bitcoin’s price has had a tough time climbing above the $72,000 mark in the past four months. It seems that the market will maintain a bearish trend until the bulls manage to take charge once more. Technically speaking, Bitcoin’s support zone could lie between $57,000 and $61,000 if the downtrend continues further.

According to the well-known crypto analyst known as Credibull Crypto, the current Bitcoin correction might have reached its bottom, and a market recovery could occur soon. However, for this bullish scenario to hold true, Bitcoin’s price needs to consistently break through the $67k resistance level in the near future.

There’s a chance our $BTC bottom is in with this SFP.
Below is what I am watching for now.
As a researcher, I have explored the possibility of delving deeper into the so-called “deep sleep” or “dreamlong” state. However, based on my previous findings, I wouldn’t be surprised if we encountered an advancement or “front running” of this zone before reaching its deepest depths.
That being said, you sell the…
— CrediBULL Crypto (@CredibleCrypto) June 18, 2024

Bigger Picture

As an analyst, I’ve noticed that there’s been a surge in negative sentiment among cryptocurrency crowds, particularly towards altcoins. This trend might offer a buying opportunity for patient traders, as history suggests that such market downturns could pave the way for a powerful parabolic rally. Furthermore, an intriguing development on the Ethereum front is the anticipated listing of spot Ether ETFs in the US, which is predicted to occur in July. This exciting news has led to a noticeable increase in unique addresses within the Ethereum ecosystem.

As an analyst, I’ve noticed that Bitcoin holders experienced a significant decrease in non-empty wallets over the past three days, which is the largest drop since right before the March 14th all-time high. In contrast to that period, Bitcoin has been steadily declining, prompting traders to sell off their holdings out of fear of potential further price drops. Conversely, Ethereum wallets continue to increase in number.

— Santiment (@santimentfeed) June 18, 2024

In due time, the much-awaited altcoin season may begin once Bitcoin’s dominance experiences a reversal. At present, Bitcoin’s dominance hovers around 56.18%.

Read More

2024-06-18 12:51