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Breaking News: Bitcoin Price Tumbles Toward $98,000: What’s Driving The Drop And What Lies Ahead
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Breaking News: Bitcoin Price Tumbles Toward $98,000: What’s Driving The Drop And What Lies Ahead

Surprise Bitcoin Selloff Causes Extreme Greed To Taper

Reynaldo Marquez
Reynaldo Marquez
Last Updated: June 11, 2024 2:00 pm
2 mins read
Bitcoin

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Blood has been shed as Bitcoin dropped below $60,000 once again and hints at more downside. The first crypto by market cap trades at $60,800, as of press time, with a 5% loss in the daily chart.

Bitcoin BTC BTCUSD
BTC crashing in the 4-hour chart. Source: BTCUSD Tradingview

Although it has seemed some recovery, Bitcoin registers a correction of around 12% from its all-time high as an increase in selling pressure caused the entire crypto market to take a dive.

Related Reading | Bitcoin Bears Are Back, Why BTC Could Even Dive Below $60K

The general sentiment in the market has flipped from extreme greed to normal greed levels, according to data from Arcane Research. Despite the correction, traders and operators remain optimistic about potential new highs.

This metric could continue to fall as Bitcoin moves at the low of a range between $58,000 to around $70,000 and the market reset. The derivatives sector is likely to be the most affected.

As NewsBTC reported, Bitcoin futures contracts across the board got overheated as BTC’s price pushed into uncharted territory. This created a lot of liquidity at the lows and a rise in funding rates.

In other words, a lot of traders took over-leveraged long positions expecting more upside, but large investors drove the price below $59,000 to take advantage of the liquidity and fill their orders.

Post-crash, funding rates have returned to neutral territory in almost every crypto exchange platform. Along with the market sentiment provided by Arcane Research, and the fact that the price of Bitcoin held at $58,6000, this suggests a potential bottom has formed, at least for the short term.

Data provided by CryptoQuant records over $33 million long liquidations in one hour as BTC’s price went below its current levels. The Open Interest (OI) decreased by 2.33% in the past day or about $350 million.

Bitcoin BTC BTCUSD
Source: CryptoQuant

Additional data provided by Glassnode indicates that the OI for Bitcoin Futures contracts has reached a 5-month low of $711,951,837 on crypto exchange Bitmex. As seen below, a dropped in OI during September and October was preceded by more BTC appreciation.

📉 #Bitcoin $BTC Futures Open Interest just reached a 5-month low of $711,951,837.33 on #Bitmex

Previous 5-month low of $713,112,500 was observed on 24 September 2021

View metric:https://t.co/GyObF5WOjC pic.twitter.com/bsa9S166ZP

— glassnode alerts (@glassnodealerts) November 16, 2021

Bloodbath Over, Bitcoin Ready To Moon?

However, Bitcoin whales could try to push the price down one more time to leverage the liquidity concentrated around $57,700, according to data from monitor Whalemap.

In addition, the apparent indirect correlation between BTC’s price and the U.S. Dollar (DXY Index) could create more hurdles for the bulls. The dollar recently broke above a major resistance zone and stands at a 16-month high.

This rally could have been triggered by macro-economic factors, including the start of tapering by the U.S. FED and the increased risk in the Asian markets due to the Evergrande crisis.

Related Reading | Bulls Giving Up? Massive Bitcoin Bid Wall Removed, What It Could Mean For BTC

The above adds to an already uncertain market. One thing seems true, BTC’s price must hold at $58,000 if it wants to return to price discovery in Q4, 2021.

DXY Index
DXY Index on a rally in the 4-hour chart. Source: DXY Tradingview
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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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