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- According to the latest analysis from CryptoQuant, Bitcoin may potentially decline to $40K, indicating a tough phase for investors.
In the last 24 hours, over $1 billion in crypto-related futures were liquidated.
On Monday, Bitcoin fell more than 15%, briefly dropping below $50,000 amid worries about a US recession and escalating geopolitical tensions in the Middle East.
This marked the first occasion since February that BTC dipped below this level before recovering to approximately $52,000.
Analysts propose that the cryptocurrency could face further declines.
More Challenges for Bitcoin?
CryptoQuant’s recent analysis suggests that Bitcoin might drop to $40,000, indicating a difficult time for investors.
#Bitcoin fell over 16% in the past 24 hours, breaking beneath the $57K support level.
This breach implies a potential decline to $40K.
Currently, traders are experiencing their most negative unrealized profit margins since November 2022. pic.twitter.com/gTWT52NO60
— CryptoQuant.com (@cryptoquant_com) August 5, 2024
The crypto analytics platform pointed out that traders are currently facing their most negative unrealized profit margins since November 2022.
This downturn signifies a considerable change in market sentiment, with heightened selling pressure as traders attempt to limit losses in an uncertain economic environment.
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Due to Bitcoin’s substantial drop, the percentage of holders in profit decreased to 75%, according to observations from IntoTheBlock.
As Bitcoin’s price fell to $50k, the percentage of holders in profit dropped to 75%.
This level was last observed in January when prices reached a local bottom around $39k. pic.twitter.com/CAR5ju5VOR
— IntoTheBlock (@intotheblock) August 5, 2024
This represents a significant reduction and the lowest level recorded since January, when Bitcoin’s price formed a local bottom near $39,000.
Bitcoin was not the only cryptocurrency impacted by the severe selling pressure. Ethereum experienced a decline of over 22% in the past 24 hours, bringing its price down to $2,264 at the time of reporting.
During the same timeframe, Solana and XRP also fell by more than 18.2% and 16.6%, respectively, along with the broader market. Meanwhile, Dogecoin saw a decline exceeding 20%.
Over $1 Billion Liquidated
The market turmoil resulted in the liquidation of $1.08 billion in crypto-related futures over the past 24 hours. Data from CoinGlass shows that $919.62 million in long positions were liquidated, while short trades accounted for $162.45 million.
Bitcoin was the most affected, with over $371 million in liquidations, comprising $310.26 million from longs and $61.22 million from shorts.
Ethereum followed closely, with nearly $353 million liquidated during the same period, including $303 million from longs and $49.6 million from shorts. Solana and Dogecoin also faced significant liquidations, amounting to $60.91 million and $13.14 million, respectively.
In total, 283,280 traders were liquidated in the last 24 hours, with the largest single liquidation order occurring on Huobi for BTC-USD valued at $27 million.
This decline subsequently caused the crypto fear and greed sentiment index to reflect “fear,” reaching its lowest level since early July.
