Key Points
- Bitcoin experienced a significant drop, triggering a surge in liquidations, especially among long positions.
- The 30-day Market Value to Realized Value (MVRV) ratio for Bitcoin remains negative, indicating that recent investors are facing losses.
Bitcoin recently underwent a noteworthy drop in its trading session, leading to an increase in liquidations. This downturn has resulted in losses for traders who have bought Bitcoin in the past month.
Bitcoin Liquidations Surge
An analysis of Bitcoin’s liquidation chart on Coinglass showed a significant rise in liquidation volume on June 24th. This spike was primarily due to a sharp drop in Bitcoin’s price. This resulted in major liquidations, particularly among long positions, which accounted for over $156 million. On the contrary, short positions saw liquidations totaling around $21 million, demonstrating that traders who had bet on a price increase were the most impacted.
Despite a slight increase in Bitcoin’s price, short positions were witnessing more liquidations at the time of writing. The volume of short liquidations was approximately $13.5 million, while long liquidations were lower, at about $5.2 million. This shift implies that traders who predicted a continued price decline are now suffering losses due to the price rebound.
Bitcoin’s Price Increases Slightly
Bitcoin’s price trend showed a significant drop on the 24th of June, with its value falling to a low of $58,414 during the trading session. By the end of the session, it had partially recovered to around $60,263, yet still recorded a 4.60% decline from its opening value. This drop triggered significant liquidations in the market.
At the time of writing, its price had risen to approximately $61,300, reflecting an increase of around 1.70%. During the decline, the Relative Strength Index (RSI) for Bitcoin fell below 30, signaling a strong bearish trend.
Although the RSI has slightly recovered above this critical threshold, it suggested that while there has been a minor improvement, BTC still predominantly exhibited strong bearish momentum.
Bitcoin Holders at a Loss
The analysis of Bitcoin’s 30-day Market Value to Realized Value (MVRV) ratio, as reported on Santiment, revealed a concerning trend of decline. This ratio, which compares the market value of an asset to its realized value, dipped below zero around the 10th of June.
The dip indicated that the average market participants were holding Bitcoin at a value lower than their purchasing price. The recent price drop exacerbated this situation, with the MVRV ratio plummeting to approximately -9.7% on the 24th of June.
At the time of writing, there had been a slight recovery in the MVRV ratio to around -8.14%, yet it remained negative. This ongoing negative value suggested that traders who acquired Bitcoin over the past 30 days were still facing losses on their investments.
A negative MVRV ratio is often viewed as an indicator that the asset is undervalued and that current holders have bought at higher prices than the current market is willing to pay, maintaining a bearish sentiment in the market.
