July 14, 2024
Bitcoin Price Drops to $61,098 Amid 'Cascading Long Squeeze'
Bitcoin price today

Bitcoin Price Drops to $61,098 Amid ‘Cascading Long Squeeze’

Tuesday, June 25, 2024: Bitcoin Price Today is $61,098. Bitcoin’s recent decline to 53-day lows can be attributed to a “cascading long squeeze” as miners continue to offload their holdings, according to analyst Willy Woo. Woo elaborated on the situation in a June 24 post on X, noting, “Speculators kept adding to new long positions, just adding more fuel for more liquidations in a cascading long squeeze.”

Source: TradingView

A cascading long squeeze occurs when numerous investors holding long positions (betting on a rise in Bitcoin’s price) begin selling their assets as the price drops to minimize losses. This selling pressure causes the price to fall further, triggering additional sell-offs from other long-position holders. Conversely, a short squeeze, which gained prominence during the GameStop stock surge in January 2021, happens when a heavily shorted asset rises, forcing short-position investors to buy back the stock at higher prices, thereby driving the price up further.

Market Sentiment and Fear Amplify Downward Pressure

Data from CoinGlass highlights the vulnerability of the current market, showing that a dip below $60,000, akin to the fall below $59,000 on June 24, could eliminate $1.16 billion in long positions. In contrast, a 3.73% upward move would clear out $2.18 billion in short positions, indicating greater trader confidence in a price decline. Woo emphasized the market’s anxiety, stating, “Worth a breakdown of what’s happening given the fear in the market.”

This market sentiment is reflected in the Crypto Fear and Greed Index, which has plummeted to its lowest level in nearly 18 months. The ongoing “post-halving miners capitulation” event further complicates the scenario. Woo explained that if Bitcoin’s price falls below a profitable threshold, miners may shut down their operations and sell their Bitcoin to cover costs and upgrades. “Superimposed on this liquidation squeeze, we have a post-halving miners capitulation,” said Woo, adding that weaker miners are being forced to liquidate.

Current Market Dynamics and Expert Opinions

As of June 25, Bitcoin’s price hovers slightly above the critical $60,000 mark, trading at $61,320 according to CoinMarketCap data. The cryptocurrency experienced its most significant daily drop in over three months on June 24, plunging 6.26% to $58,890. Crypto commentator Bitcoin Archive noted, “The biggest daily discount in price for 97 days.”

Bitcoin is down 2.06% over the past 24 hours. Source: CoinMarketCap

Despite the downturn, Jan3 CEO Samson Mow attributes the decline to market sentiment and fear rather than massive sell-offs, indicating a temporary dip driven by psychological factors rather than fundamental weaknesses. This perspective aligns with the broader market trends and highlights the intricate interplay between market sentiment, miner behavior, and trading dynamics in influencing Bitcoin’s price movements.

Image by bitcoin-schweiz from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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