Bitcoin analysis warns BTC price liquidations will start below $64K
2024.07.30 13:39
Bitcoin risked losing $66,000 after the July 30 Wall Street open as a long liquidation event appeared on the horizon.
BTC/USD 1-hour chart. Source: TradingView
BTC price weakness builds on 5% downside
Data from Cointelegraph Markets Pro and TradingView showed Bitcoin (BTC) price action producing 1.5% losses on the day.
These followed a steeper rejection from $70,000, the latest in a series of failed attempts to flip the nearby area into support in recent months.
Commenting on the latest market moves, popular trader Skew noted that the downtick had cleared around 12,000 BTC ($800 million) of open interest.
Source: Skew
Skew suggested that selling pressure had in part come on the back of news of changes at United States Bitcoin institutional investment vehicle Grayscale Bitcoin Trust (GBTC).
In a press release on July 29, operator Grayscale confirmed the creation of a new Bitcoin Mini Trust and the shifting of 10% of GBTC bitcoin holdings into it.
At the same time, GBTC saw outflows of nearly $55 million, part of a general rout among the US spot Bitcoin exchange-traded funds (ETFs) led by $205 million in outflows from the sector’s largest product, the BlackRock iShares Bitcoin Trust (IBIT).
With that, attention among market participants focused on long traders.
Trading suite DecenTrader noted that long BTC liquidations would begin should the price return to $63,600, roughly a 3.5% drop from current levels.
“Consolidation in the $53-72k range has built up a short liquidations between $74 and $80k,” part of a dedicated X thread noted.
“Longs have some 10x liquidations below $63.6k, but the big spike is below $54k and shows risk down to $45k.”
BTC/USD liquidity map. Source: DecenTrader/X
Popular trader Jelle conversely reiterated that $72,000 was a key level to squeeze out shorts.
“After taking out the downside liquidity — Bitcoin is pushing closer and closer to those short liquidations around $72,000,” he told X followers alongside data from monitoring resource CoinGlass.
“Get above those highs, and I doubt bears can hold price down again.”
Binance BTC/USDT liquidation heatmap. Source: Jelle/X
Bitcoin speculators hold off on capitulation
Analyzing investor behavior, meanwhile, onchain analytics platform CryptoQuant suggested that there was little cause for concern when it came to speculators losing their nerve.
Related: US national debt passes $35T — 5 things to know in Bitcoin this week
In one of its “Quicktake” blog posts, contributor Amr Taha compared changes in the realized cap of short-term and long-term holders.
The former, with an aggregate cost basis around $65,000, continues to shy away from impulse selling into weak price action.
“An increase in the realized cap for STH suggests that recently acquired BTC is being retained instead of sold, signaling accumulation among short-term holders,” he wrote.
Bitcoin short-term, long-term holder net position change (screenshot). Source: CryptoQuant
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
