Bitcoin experienced a decline exceeding 2% on July 4th, marking its first retest of a critical support level since October 2023.
BTC/USD 1-hour chart. Source: TradingView
The latest downturn in BTC’s price was attributed to spot selling, with data from Cointelegraph Markets Pro and TradingView showing new lows of $57,885 on Bitstamp after the most recent daily closing. A lack of bullish sentiment and consistent selling from spot markets created unfavorable conditions for Bitcoin bulls. Monitoring resource CoinGlass reported Bitcoin long liquidations nearing $60 million within a 24-hour period.
BTC liquidations (screenshot). Source: CoinGlass
Analysts observed that Bitcoin had recently crossed below its 200-day moving average (MA) for the first time in ten months, with trader Skew highlighting spot selling as the primary driver of this trend reversal around the $63.8K mark.
BTC/USD 1-day chart with 200MA. Source: TradingView
As of the latest update, the 200-day MA was positioned at $58,400, slightly below the current spot price following a brief rebound on shorter timeframes. Looking ahead, trading platform DecenTrader identified significant long liquidations potentially clustering near $50,000 if Bitcoin’s price continued to decline. Conversely, it noted that short positions could face liquidity challenges in the $76K-78K range if prices were to rise.
Bitcoin liquidation map. Source: DecenTrader
Founder of Capriole Investments, Charles Edwards, attributed the recent sell-off, totaling $24 billion, to identifiable market dynamics. He pointed out that despite the introduction of United States spot Bitcoin exchange-traded funds (ETFs) in January, these instruments had not absorbed the prevailing market pressures as expected.
Bitcoin net flows since ETF launch. Source: Charles Edwards
Edwards emphasized that while ETFs were a factor, they did not represent the sole demand catalyst in the current market environment.
This article does not provide investment advice. All investment and trading decisions carry risks, and readers should conduct their own research before making any financial decisions.