According to the latest data, when Bitcoin fell below $57,000, cryptocurrency derivatives exchanges liquidated $305.43 million. An analyst predicted that with the sell-off by Mt. Gox and the German government, “supply might exceed demand.” Conversely, QCP Capital pointed out that despite the current cryptocurrency sell-off, the options market remains hopeful.
Bitcoin’s decline, cryptocurrency liquidations surpass $305 million
On July 4th, Bitcoin fell below $57,000, reaching $56,769 per unit. It is still struggling to maintain the $57,000 level at 9:30 AM Eastern Time on Thursday, repeatedly falling below or above this range.
Stocklytics analyst Neil Roarty noted that Bitcoin’s price has reached its lowest level since February. Roarty wrote, “Investors were spooked by two unlikely whales that could potentially sell off large amounts of Bitcoin: the German government and the bankrupt cryptocurrency exchange Mt. Gox.”
The analyst added:
If another 200,000 Bitcoins worth over $10 billion were to hit the market in a short period, supply might exceed demand, and we could see a further decline in Bitcoin prices.
QCP Capital also noted the economic downturn on Thursday. QCP mentioned that Bitcoin miners are showing signs of surrender, which is a historical indicator of a price bottom, similar to the last significant drop when Bitcoin traded at $17,000 in 2022. However, the cryptocurrency company explained that the options market is showing positive signs.
QCP wrote, “Despite the cryptocurrency sell-off, the options market remains optimistic, as we continue to see a severe bias towards [Ethereum call options] for [September and December expirations].” The company added, “The liquidation clusters for Bitcoin and Ethereum are heavily skewed towards the top, thereby triggering a potential short squeeze. With the approval of the S-1 form imminent, the approval could lead to a significant rebound for Ethereum.”
During the market downturn, the total liquidation amount for cryptocurrency derivatives exchanges was $305.43 million. Of this, $270 million was from long positions, with $92.6 million coming from Bitcoin long positions. According to coinglass.com, approximately 121,992 traders faced liquidation, with the largest single transaction causing a loss of $10.49 million in BTC.
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