Bitcoin (BTC) recently fell below the $60,000 mark for the first time since late June, triggering a significant liquidation event in the cryptocurrency market.
Within just one hour, this sudden decline erased approximately $8.4 million in Bitcoin long contracts. According to Coinglass, this drop has not only impacted Bitcoin traders but also reverberated through the broader cryptocurrency derivatives market.
Long Ethereum Contracts Also Faced Liquidation
Likewise, Ethereum (ETH) has faced substantial liquidations. In the same one-hour timeframe, roughly $8.8 million worth of long Ethereum contracts were wiped out. This dual impact highlights the interconnected nature of the cryptocurrency markets, where a significant movement in one major asset can quickly influence others.
The sharp decline in Bitcoin’s value has been attributed to a variety of factors, including market sentiment, regulatory concerns, and broader economic uncertainties. Investors who had taken long positions, betting on the continued rise of Bitcoin and Ethereum prices, found themselves on the losing side of these trades as the market shifted.
Bitcoin ETFs Experienced Outflows
Meanwhile, the sharp decline comes days after United States spot Bitcoin exchange-traded funds (ETFs) experienced outflows of $1.3 billion, with Grayscale leading the exodus at $517.3 million. Furthermore, CoinMarketCap data indicated that Bitcoin’s price has experienced an 11.6% decline from $69,476 on June 10 to around $61,250 at the time of the publication.
At the time of writing, Bitcoin price has risen above $60,000 and is trading for $60,275, down 2.68% compared to yesterday. Ethereum price is trading for $3,298.83, down 3.38% compared to the past 24 hours, according to CoinMarketCap. This event underscores the volatile nature of the cryptocurrency market, where prices can fluctuate dramatically in short periods.
Concerns Due to Mt.Gox Repayment
Several commentators have issued warnings of substantial downward pressure, which has maintained the cautious market sentiment. This perspective is influenced by the German government’s anticipated Bitcoin sales and the nearly $9 billion in BTC repayments that are expected from Mt.Gox creditors in July.
Jonathan de Wet, the chief investment officer at ZeroCap, a digital asset trading firm, expressed worry regarding the ongoing obstacles in the broader crypto market. The price of Bitcoin is expected to continue to decline in the coming weeks, reaching its critical support level of approximately $57,000, according to De Wet.
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