Bitcoin is on the verge of losing $66,000 since Wall Street opened on July 30, and a long-term liquidation event is imminent.
BTC price weakness stems from 5% decline
Bitcoin (BTC) price action was down 1.5% on the day, according to data from Cointelegraph Markets Pro and TradingView.
It is the latest in a series of failed attempts in recent months to turn the area into a support zone, following a steeper rejection of the $70,000 bid.
Popular trader Skew commented on recent market trends, noting that the downtrend has resulted in around 12,000 BTC ($800 million) of open interest being unwound.
Skew speculated that the selling pressure was partly driven by news of changes at Grayscale Bitcoin Trust (GBTC), a U.S. Bitcoin institutional investment firm.
Operator Grayscale confirmed in a press release on July 29 that it is creating a new Bitcoin Mini Trust and transferring 10% of GBTC’s Bitcoin holdings to it.
At the same time, GBTC saw an outflow of around $55 million, which was driven by a general decline in US spot Bitcoin exchange-traded funds (ETFs), most notably the largest product in the space, the BlackRock iShares Bitcoin Trust (IBIT), which saw an outflow of $205 million.
Accordingly, market participants’ attention was focused on long position traders.
The DecenTrader exchange said that long BTC liquidations will begin once the price recovers to $63,600, a drop of about 3.5% from current levels.
“Consolidation in the $53,000-$72,000 range resulted in short-term liquidations between $74,000 and $80,000,” he said in part of an X-only thread.
“Long positions have a 10x liquidation below $63.6k, but the biggest spike is below $54k, and risk is down to $45k.”
Popular trader Zell, on the other hand, has repeatedly said that $72,000 is a key level to unwind short positions.
“After removing the downside liquidity, Bitcoin is getting closer and closer to a short-term liquidation near $72,000,” he told X followers, along with data from monitoring resource CoinGlass.
“Once that high is surpassed, it’s doubtful the bears will be able to keep prices low again.”
Bitcoin Speculators Postpone Surrender
Meanwhile, on-chain analytics platform CryptoQuant analyzed investor behavior and found that there is little cause for concern, even if speculators are losing their nerve.
Related: US National Debt Tops $35 Trillion — 5 Things to Know About Bitcoin This Week
Contributor Amr Taha compared the changes in realized limits for short-term and long-term holders in one of his “Quicktake” blog posts.
The former has a total cost basis of around $65,000 and continues to avoid impulse selling amidst the bearish price action.
“The increase in realized cap on STH suggests that recently acquired BTC is being held rather than sold, indicating accumulation among short-term holders,” he wrote.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.