Bitcoin price rolled back from above $ 60,400 to $ 55,000 on Monday morning. The move resulted in the liquidation of more than $ 1 billion in margin positions in the last hour and over $ 2.3 billion in 24 hours.
As a rule, traders use borrowed funds when they expect the price of an asset to move in a certain direction and expect to earn more due to this, but a movement against the position they have chosen entails a loss of capital.
According to Bybt, over 195,000 traders were liquidated per day. The events unfold after the rise in the price of bitcoin to new all-time highs above $ 61,000 over the weekend.
“The failure to settle above $ 60,000 and the pullback is likely the result of a missing or negative premium on Coinbase, reflecting institutional investor demand. I think we will see a declining or sideways trend in the bitcoin market in the short term, until significant inflows of institutional capital appear on Coinbase, ”said Ki Yong Joo, CEO of CryptoQuant analytics platform.
Coinbase has largely outperformed other exchanges during Bitcoin’s climb to new highs in recent months, but this weekend it was $ 300 lower than Binance.
“Whale-level addresses containing 1,000 BTC or more were being sold. This does not mean that the rise is over, it is just that profit-taking is taking place, ”said analyst Lark Davis.
Patrick Heusser, head of trading at Crypto Finance AG, sees the current pullback as healthy, noting that the $ 60,000 breakout was driven primarily by margin traders. Analysts suggest that Bitcoin may experience a deeper decline if the yield on US government bonds continues to rise.
At the same time, Richard Byworth, CEO of Nasdaq exchange Diginex, told Blooberg that his company expects the price of bitcoin to rise to $ 175,000 by the end of the year. Byworth admits bitcoin may still have significant upside potential, and the Fed’s money printing and dollar depreciation will push its price higher.
“We have reached the stage of institutional diffusion where four companies – MicroStrategy, Tesla, Square and more recently Meitu – took possession of 40% of the annual supply of bitcoin in just a few months,” he said.
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