CoinDesk Report:
In the past 24 hours, the total market value of the cryptocurrency market has dropped by $91 billion. Bitcoin, after 12 hours of long and short trading at around $60,000, started to sell off shortly after the Tokyo stock market opened in the morning. Bitcoin briefly fell below $58,000 and once again tested the low of a week ago, with a 24-hour decline of 5.72%. As of the time of writing, Bitcoin has returned to above $59,100. In the current weak state of Bitcoin, major tokens have also started to decline. Ether (ETH) fell by 4%, while Solana’s SOL and Dogecoin (DOGE) fell by as much as 8%. The cryptocurrency market liquidated nearly $100 million in the past hour, accounting for half of the past 12 hours.
Liquidation data tracked by CoinGlass shows that futures trades betting on higher prices lost over $230 million in the past 24 hours. Futures tracking BTC and ETH both saw long liquidations of over $60 million, while products tracking DOGE, SOL, XRP, and pepe coin (PEPE) recorded losses of at least $4 million.
For long traders, these liquidations are the highest level since the end of June. The amount of liquidation from well-known cryptocurrency exchanges even exceeded $110 million, the highest among peers. Although the overall market has been in a slump for a month, the cryptocurrency community has already accepted the current “long-term callback bottom” phase, and Bitcoin’s volatility is approaching a new low since February. However, signals of continued decline still exist.
Bitcoin spot ETF is an important reference for judging the direction of the market. According to Farside Investors data, Bitcoin ETF has seen net outflows for two consecutive days, with a total outflow of $34.2 million in two days.
In addition, the lack of new funds entering the market is also an important reason why the overall market cannot meet market expectations. The total market value of stablecoins in the cryptocurrency market has steadily increased since the middle of last year, corresponding to the continuous rise of the overall market at that time, indicating a clear transition from bear to bull. However, since early May, there has been no new money entering the cryptocurrency market, and the market value of stablecoins has been hovering around $160 billion for more than two months. In the case of insufficient liquidity in the market, there is no buying power to push the market higher.
After a week, Bitcoin has once again dropped to the $58,000 level. Is it a clearance after the callback, or is it the end of the bull market? The market opinions are divided. According to analysis by cryptocurrency KOLs, it is believed that the price of Bitcoin is being artificially suppressed, with whales using deceptive sell orders to induce retail investors and fund managers to sell for hedging.
A report released by CryptoQuant points out that for most of the time since the halving, the transaction fee income of Bitcoin miners has dropped to only 3.2% of the total daily income, the lowest share in three months. With insufficient incentives, miners have started to shut down underperforming equipment and sell Bitcoin to hedge risks, which typically indicates a bottom signal for Bitcoin. However, there are also various signals pointing to the possibility of a continued decline in Bitcoin. From the net flow of Bitcoin ETF, Markus Thielen, the founder of 10x Research, stated in his latest report that the average entry price for Bitcoin ETF buyers is estimated to be $60,000 to $61,000. Therefore, when Bitcoin fell below $60,000 yesterday, it may trigger an ETF liquidation wave, further lowering the price of Bitcoin. For example, Markus Thielen believes that the weekly and monthly reversal indicators for Bitcoin suggest a broader correction, and its price may further decline to $55,000. Andrew Kang, co-founder of cryptocurrency venture capital firm Mechanism Capital, sees a lower bottom position, and he believes that Bitcoin may experience an extreme pullback to the $40,000 range.
