Bitcoin Price Analysis: Liquidation Risks Below $64K

Bitcoin’s price challenges intensify as it struggles to maintain $66,000 as a support threshold, heightening the risk of long liquidations.

Current Market Conditions for Bitcoin

Bitcoin (BTC) narrowly avoided dropping below $66,000 following the market opening on July 30, as the threat of a long liquidation event looms.

Persistent Downward Pressure and Market Responses

Recent data sourced from platforms like Cointelegraph Markets Pro and TradingView reveals that BTC has recorded losses of approximately 1.5% for the day.

This decline follows a recent inability to maintain support after a substantial rejection from $70,000, marking yet another attempt gone awry. The market sentiment is compounded by reports from trader Skew, indicating that the recent drop has erased about 12,000 BTC (valued at roughly $800 million) in open interest.

Furthermore, market analyst Skew pointed out that part of the selling pressure arose from recent changes in the Grayscale Bitcoin Trust (GBTC), a key institutional investment vehicle in the U.S. A press release disclosed on July 29 outlined the establishment of a new Bitcoin Mini Trust and the reallocation of 10% of GBTC’s bitcoin holdings into this new product.

During the same timeframe, GBTC faced almost $55 million in outflows, part of a broader decline affecting Bitcoin ETFs in the U.S. This context prompted market focus to shift toward long traders.

According to the trading suite DecenTrader, liquidations for long positions are likely to begin if Bitcoin’s value falls to $63,600, approximately a 3.5% decrease from current trading levels.

“A consolidation between $53,000 and $72,000 has developed short liquidations around $74,000 and $80,000.”

Trader Jelle, in contrast, has identified $72,000 as a critical threshold that could trigger short liquidations as Bitcoin approaches these levels.

“If we can surpass these highs, it’s unlikely that bears will be able to maintain pressure on the price.”

Investor Behavior and Market Sentiment

In a deeper analysis of investor trends, on-chain analytics platform CryptoQuant indicated that there isn’t significant reason to worry about speculators panicking in the current market.

Contributor Amr Taha, in an article on their Quicktake blog, assessed the variations in the realized cap of short-term versus long-term holders. He noted that short-term holders have avoided making impulsive sales despite the downward trend, exhibiting signs of accumulation instead.

“The increase in the realized cap for short-term holders indicates retention rather than liquidation of recently acquired BTC,” he explained.

This content is for informational purposes only and does not constitute investment advice. All investment activities involve risks, and it is advisable for readers to conduct their own research before making decisions.