Over $100 million worth of leverage was liquidated in Bitcoin during the past 24 hours, causing concerns about a potential correction to the $50,000 mark.
Bitcoin (BTC) liquidations reached $100.4 million, with over $86 million worth of cumulative leveraged long positions liquidated, according to CoinGlass data.
The liquidations were triggered by three consecutive days of negative price action that took Bitcoin price from over $62,000 on July 2 to a low of $57,043 hit at 9:22 am UT on July 4, according to CoinMarketCap data.
Bitcoin has since bounced back to trade above 57,800 as of 9:40 am UTC but was still down over 4.5% on the daily chart.
Monitoring Bitcoin’s performance around psychological numbers like $60,000 is important to determine the progress in the current Bitcoin cycle, which is unique due to the introduction of the first spot Bitcoin exchange-traded funds (ETFs).
Related: World’s largest Bitcoin miner didn’t sell any BTC in June
Bitcoin falls below ETF buyer realized price, but ETFs aren’t panic selling (yet)
In another significant development, Bitcoin fell below the average realized buying price of the spot Bitcoin ETF buyers, or $57,979 — considered a significant support line for BTC analysts.
Despite the fall, ETF buyers haven’t started panic selling, as there were only 20.5 million worth of net total outflows on July 3. Grayscale’s ETF accounted for the majority, or $27 million worth of outflows, according to Farside Investors data.
However, panic selling of ETFs could still occur after investors return from the Fourth of July holiday, which is Independence Day in the United States, the world's largest economy.
The incoming Mt. Gox repayments, expected in early July, could add additional selling pressure for Bitcoin. The Mt. Gox creditor repayments will distribute over $9.4 billion worth of Bitcoin to 127,000 creditors who have been waiting for over 10 years to recover their funds.
Related: How long will Bitcoin’s price consolidation last?
Bitcoin correction or temporary "shakeout"?
Following the three-day price drop, Bitcoin lost its 200-day trend line for the first time in 10 months.
This means that a potential breakout will be further delayed, until BTC breaks the downtrend that started in early June, according to popular crypto analyst Rekt Capital, who wrote in a July 3 X post:
“Breakout postponed due to a failed retest of the June Downtrend as new support. This is still the trendline to watch for a shift in the trend going forward nonetheless.”
However, technical chart patterns analyzed by some traders suggest that this may just be a price shakeout — a sudden price drop caused by multiple investors exiting their positions, preceded by a sudden price recovery.
A Bitcoin shakeout is likely based on technical analysis shared by popular Bitcoin investor Elja Boom, in a July 4 X post.
Yet, analysts at 10x Research warn that Bitcoin could still revisit the $50,000 mark due to accelerating sell orders.
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