Bitcoin's drop to $60K attributed to a cascading long squeeze as traders added new long positions, leading to increased liquidations, says analyst Willy Woo.
An increasing number of traders entering new long positions was the "fuel” behind Bitcoin’s slump to $60,000, according to Bitcoin analyst Willy Woo.
Key Details:
Cascading Long Squeeze:
Speculators added new long positions, leading to more liquidations.
A long squeeze occurs when investors sell holdings as prices fall, causing further price drops.
Similar to a short squeeze but involves long-position investors selling off.
Market Data:
According to CoinGlass, a dip below $60,000 could wipe out $1.16 billion in long positions.
A 3.73% upward swing would erase $2.18 billion in short positions, indicating more confidence in downward price movement.
Market Sentiment:
Crypto Fear and Greed Index hit its lowest score in nearly 18 months.
The index measures market sentiment for Bitcoin and the broader cryptocurrency industry.
Miner Activity:
Post-Halving Miners Capitulation:
Miners might sell their coins if Bitcoin falls below profitable mining prices.
Miners selling Bitcoin to fund upgrades or closing operations due to unprofitability.
Analyst Insights:
Woo noted ongoing miner capitulation events impacting Bitcoin’s price.
Miners’ sell-offs add to the liquidation squeeze in the market.
Market Reaction:
Recent Price Movements:
On June 25, Bitcoin traded slightly above $60,000, at $61,320, according to CoinMarketCap.
Bitcoin is down 2.06% over the past 24 hours.
Daily Decline:
On June 24, Bitcoin saw its biggest daily decline in over three months, dropping 6.26% to $58,890.
Bitcoin Archive highlighted it as the biggest daily price discount in 97 days.
Expert Opinion:
JAN3 CEO Samson Mow believes the dip is driven by sentiment and fear, not by large sell-offs.
Bitcoin's recent drop to $60,000 is attributed to a cascading long squeeze, with traders' new long positions causing increased liquidations.
The sentiment-driven dip is compounded by ongoing miner sell-offs, contributing to market volatility.
Understanding these dynamics is crucial for navigating Bitcoin’s price fluctuations.
Source: Cointelegraph
Comments