Bitcoin touched its 53-day low as miners are selling off their Bitcoin and the opening of long positions by investors is a major cause of Bitcoin’s fall to $60K, according to a Bitcoin analyst Willy Woo.
A series of liquidation happens when too many investors open long positions and sell off their assets, while the price declines to avoid major loss. These phenomena cause the asset to drop in price further and affect other long positions.
Speculators kept adding to new long positions, just adding more fuel for more liquidations in a cascading long squeeze.
Willy Woo posted on June 24, X post.
The other is referred to as a short squeeze a term which became well-known when retail traders pumped up the price of GameStop stocks in January 2021, forcing large short investors to buy back the stock at a higher price to limit their losses and thus pushing the stock price up to meteoric heights.
CoinGlass data showed that when the price of Bitcoin dropped below $59K, it wiped out $1.16 billion of short positions. Now if the price correction takes place and BTC moves 3.73% upward, the short positions of $2.18 billion are at risk of liquidation, this shows the confidence of traders in the asset’s deep correction.
Woo added:
Worth a breakdown of what’s happening given the fear in the market
The Fear and Grade Index is showing the lowest score in 18 months, as it is used to measure the market sentiments for crypto assets.
Persistent Miner Sell-off Weighs on Bitcoin Prices After Halving
Woo, a Bitcoin analyst pointed out “post-halving miners capitulation” that if the price of Bitcoin drops to a certain point, it will impact miners as they will turn off their hardware and sell off their holdings in Bitcoin. The mining of Bitcoin is no longer profitable for them at such a price.
Woo stated:
Superimposed on this liquidation squeeze, we have a post-halving miners capitulation
He explained that the potential miners would sell off to upgrade their hardware, however, weak miners would stop mining.
According to CoinMarketCap, Bitcoin is is trading at $60,803 on June 25, slightly above the support level of $60,000.
On June 24, Bitcoin experienced a major drop of 6.26% to $58,890, which is highest in the last three months, according to crypto commentator Bitcoin Archive.
“The biggest daily discount in price for 97 days,” he stated on June 24, X post.
“Bitcoin dip is purely sentiment and fear-driven, not from selling off large holdings.” JAN3 CEO Samson Mow stated.
