Originally published on: July 30, 2024
Bitcoin faced the potential of dropping below $66,000 following a looming long liquidation event noted as Wall Street opened on July 30th.
Market Movement and Analysis
According to insights from Cointelegraph Markets Pro and TradingView, Bitcoin’s price action took a hit, resulting in 1.5% losses, with the current price standing at $65,399.70. This decline followed a significant rejection at $70,000, marking yet another failed attempt to establish the nearby range as a strong support level in recent times.
Market Impact and Causes
The market shift sparked by this downtick led to the liquidation of approximately 12,000 BTC (equivalent to $800 million) in open interest. Skew, a renowned trader, attributed this selling pressure partly to the developments within the United States Bitcoin institutional investment domain, particularly changes in Grayscale Bitcoin Trust (GBTC).
GBTC Developments and Outflows
In a recent press release on July 29th, Grayscale announced the formation of a new Bitcoin Mini Trust and the transfer of 10% of GBTC’s bitcoin holdings into this new entity. Concurrently, GBTC experienced outflows of nearly $55 million, indicative of a broader trend of capital moving away from US spot Bitcoin exchange-traded funds, with the BlackRock iShares Bitcoin Trust (IBIT) witnessing $205 million outflows.
Scenario for Long BTC Liquidations
Analysts at DecenTrader highlighted that a potential trigger for long BTC liquidations lies at the $63,600 price mark, representing a 3.5% dip from the current levels. The consolidation phase within the $53-72k range has primed the market for short liquidations between $74k and $80k, as observed in various market threads.
Market Participant Sentiment and Insights
Jelle, a prominent trader, highlighted the significance of the $72,000 level in applying pressure to short positions amidst Bitcoin’s liquidation dynamics. Monitoring data from CoinGlass further supported this analysis, emphasizing the momentum towards liquidating shorts around the $72,000 region.
Investor Behavior and Speculation Insights
Onchain analytics by CryptoQuant indicated limited concerns regarding speculators losing confidence in the market. Insights from their “Quicktake” blog post illustrated an increase in the realized cap among short-term holders, signaling a preference for accumulating rather than selling during volatile price movements.
Disclaimer: This content serves for informational purposes only and does not constitute investment advice. Readers are advised to perform thorough research before making any investment decisions.
