Bitcoin Faces Major Liquidation as Price Dips Below $61,000; Market Braces for Sell Pressure
Summary:
Bitcoin's price dip below $61,000 prompted the liquidation of more than $122 million in leveraged long positions, raising the possibility of it falling below the $60,000 milestone. This followed the announcement by collapsed crypto exchange Mt. Gox's plans to repay its defunct users, a move that could add significant sell pressure to the market. Moreover, the digital asset seems to be oversold, showing conditions similar to when it was valued at $26,000.
As Bitcoin's price dipped beneath $61,000, the cryptocurrency saw the liquidation of more than $122 million in leveraged long stakes, increasing the likelihood of it dropping below the crucial $60,000 level. CoinGlass data reveals that up until 1:25 pm UTC, $122 million in aggregate long Bitcoin (BTC) leveraged positions were liquidated within a 24-hour cycle. This wave of liquidations occurred as a result of a 5% intraday decrease in Bitcoin’s value, which momentarily slumped below $61,000 at 1:25 pm UTC, June 24. According to CoinMarketCap data, the pioneer cryptocurrency’s value has plummeted by over 7% in the past week.
Critical price levels of a base asset can be signified by leveraged placements. As per CoinGlass, a potential slide below the $60,500 benchmark could instigate the liquidation of more than $180 million in leveraged long positions on all trading platforms.
The price tumble ensued hours after the defunct crypto exchange, Mt. Gox announced its plans to commence repayment procedures for its inactive users. Mt. Gox owes an estimated $9.4 billion in Bitcoin to about 127,000 creditors, who have languished for over a decade to access their monies. This could induce a significant selling pressure on the market, asserts Eric Balchunas, a senior ETF analyst at Bloomberg. He explained in a June 24 X post that this is tantamount to the negation of over half of all the ETF inflows in a single blow.
Further amplifying the impending selling pressure, a wallet, tagged by the German government, moved nearly 6,500 BTC on June 19, Arkham Intelligence reports. As of February 2024, the wallet contained nearly 50,000 BTC, equating to over $3 billion, given today's Bitcoin price exceeding $61,000.
In the wake of the price slump to less than $61,000, Bitcoin has become the most oversold since it was valued at $26,000. This is based on the Relative Strength Index (RSI), a prominent momentum pointer used to determine whether an asset is oversold or overbought, based on the magnitude of recent price shifts. As per the daily chart, Bitcoin’s RSI has plummeted to 28, hinting that the BTC is in “oversold” conditions. The last occasion where Bitcoin’s RSI was below 30 was in August 2023 when it was priced at the $26,000 mark.
Published At
6/24/2024 4:53:48 PM
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