Bitcoin
Bitcoin Drop Below $70K Triggers $400M Liquidations – All the Details
- Long liquidations were much larger than shorts after BTC fell below $70,000
- Demand for the coin may decline as sentiment remains negative
The crypto market, led by Bitcoin [BTC], I witnessed a tough day at the office on June 7th as prices plummeted. At press time, BTC had lost 2.83% of its value in the last 24 hours, trading at $69,262.
As a result of the decline that would have been provoked according to US jobs data, the total market capitalization has fallen to $2.55 trillion. This was a 3.48% drop in a single 24-hour period. As expected, traders were also not immune to the effects of this update, according to data from Coinglass.
At the time of writing this article, the total value of settlements was US$410.42 million. Of this total, Bitcoin contracts represented US$70.73 million.
Source: Coinglass
Settlements change the point of view
Crypto liquidations occur when market conditions are unfavorable. Because of this, exchanges forcibly close the leveraged positions of traders who can no longer meet margin requirements.
Notably, most of the settlements that occurred within the deadline were long. For context, longs are traders who bet on a price increase. Therefore, it was evident that many traders were bullish on the price of Bitcoin since it began trading above $71,000 on June 7.
Furthermore, the fall in prices appeared to have affected sentiment across the market. Although the weighted sentiment was negative before the cascade of sell-offs, the reading fell further to -0.794.
This decline implied that most online conversations about Bitcoin leaned towards the bearish side. As such, demand for the coin may be sluggish, suggesting the price may move back down the charts.
Source: Santíment
If this is the case, the value of BTC could fall to $67,450. However, outside of on-chain activity, a key factor supporting a recovery is Bitcoin ETF total net flows.
Next week is crucial for BTC
For those unfamiliar, a Bitcoin ETF is a product that exposes investors to the price movement of the financial instrument. However, this does not mean that investors would directly own BTC.
According to crypto investment tracking tools, total net inflows on June 7 were $131 million. Giving details of the collapse, noted reporter Colin Wu,
“As of June 7, the total net flow of Bitcoin spot ETFs was $131 million. The Grayscale ETF GBTC had a single-day outflow of $36.3411 million, and the BlackRock IBIT ETF had a single-day inflow of $168 million. The total net asset value of Bitcoin spot ETFs is $61.104 billion.”
Source: Valor Sosó
Although the starters were a little lower than previous days, the fact that it was higher than the outflows suggested that BTC could escape a significant correction. If flows are greater by Monday, the price of Bitcoin could revisit US$71,000. Otherwise, the price may move sideways.
However, another thing that could affect Bitcoin next week is the FOMC meeting. FOMC stands for Federal Open Market Committee. The committee is responsible for determining monetary policy in the United States.
To read Bitcoins [BTC] Price prediction 2024-2025
The meeting usually stimulates volatility in the market and is scheduled for June 12th. If the agency reduces interest rates, BTC could see a increase in value amid high volatility. However, a higher rate could contribute to another decline in the crypto price.