Warning from Master Bitcoin Analyst: Massive Liquidations Coming!

The price of Bitcoin (BTC) has not yet recovered from the momentum loss seen in the past few days. However, the cryptocurrency market seems to be under threat of further decline. Interestingly, this decline may be driven not by bearish sentiment, but rather by bullish sentiment among investors.

Bitcoin experienced an unexpected drop

The price of Bitcoin plummeted from $62,000 to $53,300, shocking the cryptocurrency market and shattering many hopes of a rise. A total of $263 million worth of long positions were liquidated in the futures market within three days. This is the second highest liquidation in the past two weeks, with the previous high level recorded in April three months ago. Generally, such high liquidations force investors to calm down and allow the market to cool off. However, Bitcoin holders seem to disagree with this view. The drop is considered to be influenced by the pessimistic speech made by Federal Reserve Chairman Jerome Powell earlier this week.

The market has too much paper in the .

Despite heavy long liquidations, we are seeing more longs coming in to replace them, preventing a proper reset.

Chart: Open Value Oscillator… OV is a measure of how many bets are in the , denominated in BTC. pic.twitter.com/wxStH2alGy

— Willy Woo (@woonomic) July 6, 2024

Investors are expecting a quick recovery and are ready to profit from it. Analyst Willy Woo pointed out the difference between buying futures and buying spot, emphasizing that futures could create a bearish market environment and lead to further losses. According to the Bitcoin Open Value Oscillator, there are still approximately half a million long positions open in the futures market. If the price of Bitcoin continues to fall, these long positions could be liquidated, resulting in an extended bearish period for Bitcoin.

What is expected in the price now?

Bitcoin, which was traded at $56,961 during writing, stabilizes after dropping to nearly $53,300 yesterday. The cryptocurrency has yet to realize the expected 17% drop caused by the double top formation that occurred four months ago. This prediction, as stated above, aims for a drop to $50,900, which will result in a significant amount of long position liquidation. If Bitcoin loses its $55,000 support, this possibility will further strengthen.

On the other hand, if the Bitcoin price can make an upward bounce from $55,000 and turn $58,800 back into a support level, the recovery may begin. This will allow it to rise to $60,000 to invalidate the bearish thesis. As a result, the Bitcoin market is at a critical stage. Investors' expectation of a quick recovery can destabilize the market and trigger the expected decline. It is necessary to closely monitor whether Bitcoin can maintain the support of $55,000 in the coming days and whether the price movements confirm the aforementioned predictions.

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