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05/08/24
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Bitcoin Struggles at $60K: Market Volatility Leads to Major Liquidations
Bitcoin is currently facing challenges in breaking out from the $60,000 price level, exhibiting signs of instability in recent trading sessions. On August 3, the cryptocurrency encountered a notable drop, temporarily slipping below this critical level. This decline came after a brief period of trading above $62,000 earlier that day, which created significant waves in the market, leading to the liquidation of many leveraged positions.
In just 24 hours, over $197 million worth of leveraged trades were liquidated, reaching a peak of $288 million during intense selling activity. This trend underscores the ongoing volatility in the cryptocurrency market, as the failure of Bitcoin to secure a firm position above $60,000 has contributed to a cautionary stance among traders and investors. The atmosphere of uncertainty was further exacerbated by news regarding repayments initiated by the distressed lender Genesis Global Capital, which added more Bitcoin and Ethereum into circulation.
The dominance of Bitcoin and Ethereum in the market has intensified the overall bearish sentiment affecting other digital assets as well. Despite Bitcoin and Ethereum leading in liquidation amounts—$46.19 million and $57.22 million respectively—other cryptocurrencies like Solana are also feeling the repercussions, with over $15 million in liquidations.
A breakdown of the total liquidations indicates that a significant proportion, approximately $159 million, stemmed from long positions. Major exchanges such as Binance, OKX, and Bybit recorded the bulk of these liquidations, showing an alarming trend of an 80% liquidation rate on long positions.
This trend of significant liquidations has been a recurring theme within the cryptocurrency space, particularly in the context of short-term bearish market conditions. With Bitcoin struggling to establish a solid foothold above $60,000, and amid substantial outflows from Bitcoin exchange-traded funds (ETFs), the potential for continued volatility in the coming weeks remains high. The latest data reflects a significant $237.4 million outflow from these funds, the most substantial since early May, highlighting a shaky environment for Bitcoin and its peers.
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