Bitcoin (BTC) has dropped 8% to a nine-week low of $65,360 from Tuesday’s high of $71,300 amid increasing geopolitical risks surrounding the US-Iran war.
Key takeaways:
- Bitcoin slipped to $65,000 on Wednesday in a market-wide correction, liquidating $774 million in longs.
- Traders say Bitcoin needs to hold $60,000 as support to avoid a deeper correction in BTC price.
Bitcoin wipes out longs in tumble to $65,000
Data from TradingView showed new BTC price lows of $65,362 on Bitstamp, the lowest since March 29 as sellers stayed in control.
BTC/USD daily chart. Source: Cointelegraph/TradingView
This extended the deviation from the local high of $82,800 to 21% and was accompanied by massive liquidations across the derivatives market.
Related: Bitcoin’s $224K ‘fair value’ may emerge if sovereign debt fears deepen: Bitwise
More than $1.58 billion in long positions were liquidated, with Bitcoin accounting for $774.2 million of that total. Ether (ETH) followed with $440 million in long liquidations.
Across the board, a total of $1.83 billion was wiped out of the market in short and long positions, marking the largest liquidation since Feb. 6, when BTC price tanked to its multi-year low below $60,000.
Total crypto liquidations across all exchanges. Source: CoinGlass
“This marks one of the larger single-day events in recent months,” analysts at CryptoBanter said in an X post on Wednesday.
Pseudonymous analyst Byzantine General shared Velo data, which tracks liquidations from four major crypto exchanges: Binance, Bybit, OKX and Deribit, saying:
“Highest $BTC long liquidations event since the infamous October 10 black swan event.”
Bitcoin aggregate liquidations. Source: X/Byzantine General
Fellow analyst DonaX₿τ pointed out that the $1.5 billion in long liquidations recorded today were lower than the $1.6 billion posted during the Covid crash in 2020, adding:
“This industry is growing.”
Meanwhile, Bitcoin supply on Binance, the world’s largest crypto exchange by trading volume, has reached a three-month high of 659,000 BTC.
This signifies a “potential for heightened selling pressure in the market, especially if it coincides with declining prices or increased volatility,” CryptoQuant analyst Arab Chain said in a QuickTake note on Wednesday, adding:
“Rising supply on exchanges can amplify price volatility and selling pressure, especially if inflows continue in the coming period.”
Bitcoin supply on Binance. Source: Cryptoquant
As Cointelegraph reported, Bitcoin is now in a fresh distribution phase fueled by increased inflows to exchanges amid extreme fear.
$60,000 is now Bitcoin’s last line of defence
BTC swept lows around $65,000, leaving traders questioning where Bitcoin is likely to find support.
Bitcoin is in an “interesting zone” below $66,000 with bulls looking at the “area at $61K with the 200-Week MA for support,” MN Capital founder Michael van de Poppe said in a Wednesday post on X, adding:
“Those are important to be looking at crucial zones of interest for support and I’m sure that I’ll be going to accumulate more positions within this region.”
BTC/USD weekly chart. Source: Michael van de Poppe
Analyst Colin Talks Crypto said the $65,000-$66,000 is “a reasonable support level for a short-term bounce,” with the possibility of the BTC/USD pair later retesting the $60,000 support zone.
“Re-testing $60k is still highly likely. And breaking below it later this year is definitely not ruled out.”
BTC/USD six-hour chart. Source: X/𝙲𝚘𝚕𝚒𝚗 𝚃𝚊𝚕𝚔𝚜 𝙲𝚛𝚢𝚙𝚝
As Cointelegraph reported, bulls are expected to defend the $60,000 level aggressively, as a break below it may plunge Bitcoin into a new downtrend.
