On July 4th, Bitcoin’s value experienced a decline exceeding 2%, marking a significant moment as it revisited a crucial support level that hadn’t been tested since October of the previous year.
**BTC/USD 1-hour chart. Source: TradingView**
The recent downturn in Bitcoin’s price has been attributed to “spot selling.” According to data from Cointelegraph Markets Pro and TradingView, Bitcoin hit new local lows of $57,885 on the Bitstamp exchange following the most recent daily trading session. The combination of a subdued market sentiment and consistent spot market sales has presented challenging conditions for those optimistic about Bitcoin’s value.
Monitoring service CoinGlass reported that within a 24-hour period, Bitcoin (BTC) long position liquidations neared the $60 million mark.
**BTC liquidations (screenshot). Source: CoinGlass**
Skew, a well-known trader, remarked on the price movements, pointing out that for the first time in ten months, BTC/USD had moved below its 200-day moving average (MA). He highlighted that the downward trend, which began after a reversal at approximately $63.8K, was primarily driven by spot market sales.
**BTC/USD 1-day chart with 200MA. Source: TradingView**
Currently, the 200-day MA is positioned at $58,400, which is just slightly under the spot price following a minor rebound.
Looking at the broader picture, the trading platform DecenTrader has identified a significant cluster of long position liquidations that could be triggered if Bitcoin’s price were to decrease further, particularly around the $50,000 mark. “If Bitcoin’s price were to fall, then the $51k – $52k range is where there’s a substantial amount of liquidity for 3x, 5x, and 10x long positions. Conversely, short position liquidity is situated between $76k and $78k,” the platform observed.
**Bitcoin liquidation map. Source: DecenTrader**
Charles Edwards, the founder of Capriole Investments, a quantitative Bitcoin and digital asset fund, has pinpointed specific factors that have contributed to the recent decline. In conjunction with data from the onchain analytics firm Glassnode, Edwards noted that Bitcoin has been under considerable sell-side pressure throughout the year. Despite the introduction of United States spot Bitcoin exchange-traded funds (ETFs) in January, these financial instruments have not been sufficient to counteract the negative impact.
“This is the reason we haven’t seen a significant price surge yet. Factors such as Saylor, Michael Dell, and ETFs are merely distractions,” he expressed to his audience.
**Bitcoin net flows since ETF launch. Source: Charles Edwards**
Edwards emphasized that in his view, ETFs do not represent the sole source of demand in the current market.
Please note that this article does not offer investment advice or recommendations. All investment and trading decisions involve risks, and individuals should perform their own research before making any financial decisions.