What Caused the Bitcoin Price Collapse and What Will Happen Next
Date: 2024-06-25 Author: Oliver Abernathy Categories: CRYPTO PAYMENTS
The price of Bitcoin has skyrocketed in recent days, leading to hundreds of millions of liquidations across the board. As traders and analysts speculate on the future, renowned crypto analyst Willy Wu offers short-term price targets for BTC.
Sharp Drop in BTC and Liquidation
Yesterday, the price of Bitcoin fell sharply, reaching its lowest level since early May. The cryptocurrency fell to $58,400 before starting to recover. This spike in volatility resulted in approximately $360 million in liquidations in the futures market, of which $280 million was long positions.
Willy Wu, a well-known cryptocurrency advocate and veteran, provided an analysis of the current situation. According to him, the movement was caused by a long cascade of liquidations in the futures market. The main target for liquidation of leverage was $62,500, but speculators continued to open new long positions, increasing pressure on the market.
Miners' Capitulation
An additional factor in the collapse was the capitulation of miners after the halving. Miners are actively selling BTC to pay for equipment upgrades, as old equipment is no longer profitable. The weakest miners close their operations and are liquidated.
Wu predicted a short-term reversal, which happened - the price of BTC returned to $61,000. However, the analyst warns that Bitcoin is still at risk. It is important to monitor the number of speculations and leveraged positions. According to him, the system is not ready for further growth without clearing open interest in futures.
Current situation
Data shows that less than 3% of BTC's open interest has been lost in the last 24 hours. This suggests that the system is not yet ready for a sustainable upward movement. Investors should be cautious and monitor market developments.
Despite the recent collapse, Bitcoin is showing signs of recovery. However, the market remains unstable, and further movement will depend on the clearing of speculative positions and the stability of miners. It is important to continue to monitor the situation and take into account all factors affecting the price of Bitcoin.
