Key Points
- Bitcoin’s performance this week has been negatively influenced by news, leading to a price drop.
- Bitcoin’s long positions have started getting liquidated, which could further impact the cryptocurrency’s value.
After experiencing a significant rise last week, Bitcoin has seen a downturn, driven by unfavorable news.
The liquidation of Bitcoin’s longs is another potential issue for the leading cryptocurrency.
Bitcoin’s Market Performance
Last week, enthusiasm for Bitcoin reached near-euphoric levels, largely due to the Bitcoin 2024 conference. However, this week, the market has slowed, which is reflected in Bitcoin’s price action.
Just as positive news fueled Bitcoin’s rally, negative news has impacted its performance this week. This has resulted in a dip in Bitcoin’s price by almost 6% to its $66,042 press time levels.
Bitcoin managed to recover approximately 30% from its July lows. Short-term traders who bought into the dip may therefore be motivated to sell, contributing to the ongoing retracement.
Market Uncertainty and Profit-Taking
The market has become more cautious this week due to the FOMC data and the upcoming FED meeting. This uncertainty often influences investment decisions, leading many traders to exit their positions and wait for a clearer market outlook before making their next move.
This could explain the profit-taking, which may have been exacerbated by new data from Mt. Gox. According to Lookonchain, 47,229 BTC was transferred to anonymous wallets in the last 24 hours, sparking further sell pressure concerns.
If the transferred BTC were to be dumped into the market, it could create roughly $3.8 billion worth of sell pressure.
Liquidation of Longs
Bitcoin’s long positions could have contributed to this week’s rapid pullback. There were two major zones identified, the first at the $68,875 and $68,901 price levels, where BTC longs reached $101.8 million. The second major zone was between $69,472 and $69,500.
Bitcoin quickly dipped below these two leveraged long positions, potentially providing more downside liquidity for short sellers.
Whether Bitcoin will dip further remains to be seen, as market dynamics can change at any moment. Nonetheless, Bitcoin reserves ended July at their lowest levels since 2018, with roughly 2.6 million BTC remaining on exchanges at press time.
