Bitcoin has been under immense selling pressure over the past 24 hours, with the digital asset breaking below the $60,000 support level and reaching a recent low of $57,800.
According to Coinglass data, over $77 million worth of Bitcoin longs have been liquidated on central exchanges in the past 24 hours. This is part of a total of $92 million in liquidated BTC positions. In the broader crypto market, over $295 million has been liquidated on central exchanges, with long positions worth around $259 million.
Ether, the second largest cryptocurrency, is also facing significant liquidations, with over $71 million liquidated, $62 million of which were long positions.
Liquidation occurs when a trader automatically liquidates a position because they do not have enough funds to maintain the position, which typically occurs when market volatility erodes the initial margin or collateral.
Analysts say that despite the recent decline in the cryptocurrency market, derivatives traders are expecting prices to rise in the coming months, especially for Ether.
According to QCP Capital analysts, “The options market remains bullish as interest in Ether calls remains heavily biased ahead of the September and December expirations.”
A QCP Capital report on Thursday detailed the factors that could cause prices to break out of their current downtrend. The analysts identified two dynamics that could drive a reversal in further price corrections. “Bitcoin and Ether liquidation clusters are heavily biased to the upside, opening up a potential short squeeze,” the QCP Capital analysts added.
They also said that the S-1 form for the spot Ethereum exchange-traded fund (ETF) is in the works, and that “approval could lead to a strong rally in ETH.” The report added that given the recent Bitcoin sell-off driven by factors such as Mt. Gox and signs of miner capitulation, ETH is likely to see a stronger rally.
A QCP Capital market report highlighted that Bitcoin miners are showing signs of capitulation. “Historically, this has been associated with price bottoms, and the last time a similar hash rate drop occurred was in 2022, when Bitcoin was trading at $17,000.”
According to a Wednesday CryptoQuant report, there are various signs of miner capitulation, which historically has indicated a price bottom. The report noted that miners have been paid “extremely low wages” for most of the period since April, according to the data provider’s metrics. CryptoQuant said total daily miner revenue has fallen from $79 million on March 6 to $29 million today.
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