The once unstoppable Bitcoin (BTC) price has hit a snag. Prices have fallen below the critical $66,000 support level for the first time since surpassing the all-time high (ATH) above $73,000 earlier this week. This correction sent shockwaves through the cryptocurrency market, causing investors to struggle and altcoins to reel.
Bitcoin price hit the wall: What happened?
According to Kriptokoin.com data, Bitcoin is currently at an unstable level of $65,777.25, indicating a 3.6% decline in just 24 hours. Price volatility is evident as Bitcoin reached a daily high of $70,046.27 before succumbing to the current downtrend.
Although some market experts dismissed this as a minor correction, the continuous price decline has caused serious damage to altcoins in particular. This is also reflected in the surprising number of liquidations. More than 151,000 traders were forced to sell their assets at a loss in the past day. Bitcoin itself has borne the brunt of these liquidations; Long positions worth more than $104 million were wiped out. This brutal sell-off spread to a wider market. Additionally, total liquidations increased to $426 million.
What do liquidation data indicate?
Further examination of the liquidation data reveals a clear trend. Those most affected by this situation were long-term traders who bet on the price increase. They suffered a staggering loss of $86.36 million, compared to a relatively modest $18.15 million for short traders expecting a price drop. The pain wasn’t limited to Bitcoin. Ethereum, the second largest cryptocurrency, witnessed a total liquidation of $47.98 million. Long and short positions lost $32.79 million and $15.18 million, respectively.
Even the angry meme coin industry was not spared. BOOK OF MEME (BOME), a recent Solana-based sensation, felt the heat with a $10.16 million liquidation. While this pales in comparison to established names like Shiba Inu (SHIB), which had losses of $4.05 million, it is a significant blow for a relatively young cryptocurrency with a smaller market cap.
Is there any silver lining?
But there is still a glimmer of hope amidst the current turmoil. Many analysts are predicting a short-term recovery triggered by certain market triggers. One such potential catalyst is the emerging spot Bitcoin ETF market. The steady flow of capital into these exchange-traded funds has played a crucial role in mitigating the price decline so far. Industry leaders like Galaxy Digital CEO Mike Novogratz believe continued demand for Bitcoin ETFs will keep valuations high, indicating Bitcoin is still in “price discovery mode.”
Another factor that could reignite Bitcoin excitement is the upcoming halving event. This pre-programmed protocol change will significantly reduce the reward rate for mining new Bitcoin blocks, effectively limiting its supply. Historically, Bitcoin halvings have coincided with price increases, and analysts believe this trend could hold true again if demand remains strong.
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