The price of Bitcoin has dropped below $60,000 due to outflows from ETFs and options expirations triggering market liquidations. Analyst Ali Martinez warns that if Bitcoin rebounds to $62,600, there could be over $1 billion in liquidations.
Bitcoin (BTC) has once again fallen, with the cryptocurrency dropping below $60,000 on price charts. This signifies a 4% decrease within just 24 hours. In fact, this round of devaluation marks Bitcoin as the most affected cryptocurrency amidst the overall market downturn.
This drop comes as the cryptocurrency market has seen a decrease of over 4% in the past 24 hours, affecting major assets such as Bitcoin, Ethereum, DOGE, BNB, and LINK.
However, it’s worth noting that as of writing, the fear and greed index is at 48, indicating neutral sentiment among market participants. In simple terms, investors are not overly fearful or greedy at the moment, but uncertainty remains widespread.
This is especially the case given the expected commencement of repayments to creditors by Mt. Gox this month. With over $9 billion worth of BTC owed to more than 127,000 creditors, many of whom will seek to profit from unrealized gains, this invites selling pressure.
Bitcoin ETF outflows and investor concerns
The outflow of funds from the U.S. Bitcoin ETF has made a significant contribution to the current market situation. After five consecutive days of inflows totaling $129.5 million as of July 1, this trend has reversed, with outflows of $13.7 million on July 2.
Bleiweiss IBIT and Fuda FBTC saw inflows of $14.1 million and $5.4 million, respectively. However, these gains were offset by a massive outflow of $32.4 million from Grayscale. Therefore, this shift in ETF trends has sparked concerns among investors about the price trend of Bitcoin.
At the same time, the impending expiration of a large number of Bitcoin and Ethereum options has exacerbated market volatility. In fact, Deribit’s data shows that BTC options worth over $1.04 billion, with a put/call ratio of 0.80, will expire on Friday, July 5.
The maximum pain price for these options is $63,000, indicating a key threshold that could potentially influence investor behavior and market dynamics. Therefore, the anticipated expirations have led to cautious trading and increased uncertainty among market participants.
Liquidations exacerbate market sell-off
According to CoinGlass data, the recent sell-off has triggered over $260 million in liquidations within just 24 hours. During this period, over 100,000 traders were liquidated, with the largest liquidation involving ETH-USDT-SWAP on OKX.
Bitcoin faced a total of $67 million in liquidations, while Ethereum’s liquidation amount was $63 million.
Despite the current economic downturn, some analysts remain optimistic about the market’s future. They anticipate potential gains related to impending regulatory decisions.
However, analyst Ali Martinez has warned of the possibility of further liquidations. According to him, if Bitcoin rebounds to $62,600 again, the market could see over $1 billion in liquidations.
Delay in Ethereum ETF launch
Finally, the delay in the launch of the Ethereum ETF has further exacerbated the current pessimistic sentiment in the market. The U.S. Securities and Exchange Commission has set a new deadline for the submission of the form as July 8, delaying the expected approval process.
The community has expressed dissatisfaction with this, and Nate Geraci, president of ETF Store, has also expressed disappointment with the lengthy process. Many are now hoping that once these ETFs are launched, BTC and other parts of the cryptocurrency market will continue the bull market.
