Crypto Derivatives Liquidate $305M as Bitcoin Slips
Bitcoin slipped below $57,000 on July 4, hitting $56,769 per coin. As of 9:30 a.m. EDT on Thursday, it continues to teeter around the $57K mark, fluctuating below and above this threshold throughout the morning.
Neil Roarty, an analyst at Stocklytics, highlighted that Bitcoin has reached its lowest point since February. He attributed investor unease to potential large sell-offs from unexpected sources like the German government and the bankrupt Mt Gox exchange.
Roarty explained, “The market could face an influx of 200,000 bitcoins—worth over $10 billion—within a short period. This surplus supply may outstrip current demand, potentially driving Bitcoin’s price down further.”
QCP Capital also commented on Thursday’s downturn, noting indications of miner capitulation, a historical signal often preceding price recoveries, akin to the major hashrate decline observed in 2022 when BTC traded at $17,000. Despite the broader sell-off, QCP pointed out optimism in the options market.
“Despite the crypto market downturn, there’s still optimism in the options market, particularly with significant interest in ethereum calls for September and December expirations,” QCP stated. “Liquidation patterns on BTC and ETH are skewed towards upward movement, potentially triggering short squeezes. Additionally, pending S-1 Form approvals could catalyze a strong rebound in ethereum.”
During the market decline, crypto derivatives exchanges saw total liquidations amounting to $305.43 million. Long positions accounted for $270 million of this figure, with bitcoin longs contributing $92.6 million. Coinglass.com reported that 121,992 traders faced liquidations, with the largest single loss being $10.49 million from a BTC trade.
What are your thoughts on the crypto market’s downturn on July 4? Share your opinions below in the comments section.
