Warning from Veteran Bitcoin Analyst: Massive Liquidations Are Coming!

Usta Bitcoin Analistinden Uyarı: Devasa Tasfiyeler Gelecek!
Usta Bitcoin Analistinden Uyarı: Devasa Tasfiyeler Gelecek!

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Bitcoin (BTC) price has yet to recover from the loss of momentum seen over the last few days. However, the cryptocurrency market seems to be under threat of further declines. However, interestingly, the reason behind this decline may not be the bearish tendency of investors, but rather the bullish tendency.

Bitcoin experienced an unexpected decline

Bitcoin price dropped from $62,000 to $53,300, shocking the cryptocurrency market and dashing many bullish dreams. A total of $263 million worth of long positions were liquidated in the futures market in three days. This is the second highest liquidation in the last two weeks, with the previous high recorded three months ago in April. Usually such high liquidations force investors to calm down and pull back to allow the market to cool. However, Bitcoin holders seem to disagree. The decline is considered to be influenced by the pessimistic speech made by Federal Reserve Chairman Jerome Powell earlier this week.

Investors expect a rapid recovery and stand to profit from it. Analyst Willy Woo pointed out this point when explaining the difference between buying futures and buying spot. He stated that futures transactions could create a bear market environment and this could lead to more losses. According to the Bitcoin Open Value Oscillator, there are still approximately half a million long positions open in the futures market. If the price of Bitcoin declines further, these long positions may be liquidated. This could result in an extended bear period for BTC.

What to expect at the price now?

Bitcoin price, which was traded at $56,961 at the time of writing, is stabilizing after dropping to almost $53,300 yesterday. The cryptocurrency has yet to realize the expected 17% decline resulting from the double top formation that formed four months ago. This forecast targets a drop to $50,900, which would lead to massive long position liquidations as mentioned above. If Bitcoin loses the $55,000 support, this possibility will become even stronger.

On the other hand, if Bitcoin price can make an upward bounce from $55,000 and turn $58,800 back into the support level, the recovery could begin. This would allow it to rise to $60,000 to invalidate the bear thesis. As a result, the BTC market is at a critical stage. Investors’ expectation of a rapid recovery could destabilize the market and trigger the expected decline. It is necessary to closely monitor whether Bitcoin can maintain the $55,000 support in the coming days and whether the price movements will confirm the above-mentioned predictions.

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Warning from Veteran Bitcoin Analyst: Massive Liquidations Are Coming!