Bitcoin Plummets to $62K, $310M in Long Positions Liquidated
On August 1, Bitcoin experienced a sharp drop, declining from $64,000 to $62,800. This sudden downturn resulted in the liquidation of long positions worth $310.27 million in a 24-hour period that saw a total of $337 million wiped out, according to Coinglass.
In the past 24 hours, over $77.07 million worth of long Bitcoin positions were liquidated, with $26.6 million of that occurring in just the last four hours. The largest single liquidation involved an ETH-USDT swap worth $4 million on the OKX crypto exchange.
Market analyst DW noted that despite the significant drop, the situation was not “extreme.” DW pointed out the current low liquidity in the market, a condition that amplifies the effects of selling. DW mentioned ongoing concerns, including the unresolved Mt. Gox issue and the seasonal low liquidity post-Bitcoin 2024 conference, which could magnify any selling activity.
In contrast, independent analyst Mags offered a more optimistic perspective. Mags highlighted that Bitcoin was still above a crucial moving average support, trading near the upper boundary of a descending broadening wedge. Mags also pointed out that the "hash ribbons" had issued a buy signal, suggesting a potential for recovery. According to Mags, the current price action resembles previous instances where the hash ribbons turned green, leading to significant upward movements after initial dips and consolidation.
Mags emphasized that as long as Bitcoin’s price remains above $60,000, these dips could present buying opportunities. Historical analysis supports this cautious optimism, despite a typically challenging August for Bitcoin. Data from Coinglass reveals that Bitcoin’s average returns for August since 2013 have been about 2.24%, with the cryptocurrency closing in the negative in eight out of the last eleven years, showing a median return of -6%.
