Bitcoin Plummets Under $60,000 Amidst Market Anxiety – What’s Next?
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Bitcoin’s Struggle in a Fearful Market
Bitcoin has once again slipped below the $60,000 mark, following a brief period of recovery last week. This downturn occurred just as the market was starting to regain hope for a rebound.
The current performance of Bitcoin’s price mirrors the existing sentiment in the crypto market. The Bitcoin/crypto fear and greed index has shifted from fear to extreme fear within the last day, leading to a withdrawal of liquidity from the cryptocurrency.
Concerns Over Global Economic State
Concerns about the global economic markets are growing, especially after the recent unwind of the Japanese Yen carry trade. Some analysts are worried about potential further economic fallout, coupled with increasing FUD regarding a possible recession.
From a liquidity perspective, Bitcoin could potentially be exposed to liquidations. Our analysis showed that ‘out of the money’ addresses peaked at 20.3% during the recent dip on 5th August. As of 11th August, the number of ‘out of the money’ addresses was 7.14 million.
Approximately 3.7 million addresses have injected liquidity into Bitcoin near recent lows. The recent surge that quickly drove BTC up may have stimulated more hype and a desire for leverage. BTC’s estimated leverage ratio saw a rise between 9th and 11th August.
The bullish expectations and leverage may have set the stage for another wave of liquidations. BTC net longs hit a peak at $53.92 million on 11th August, around the $61,129 price range. This was shortly before a strong bearish move that drove the price below $60,000.
