Bitcoin (BTC), the largest cryptocurrency in the market, was expected to continue its bull run after consolidating its gains. However, on June 14th, just before its daily close, Bitcoin suffered a 3% decline, dropping below $25,000 and reaching as low as $24,700, a price level not seen since mid-March. In light of these developments and the mounting regulatory pressure from the US Securities and Exchange Commission (SEC) on the nascent industry, many are starting to believe that the recent bull run for BTC was nothing more than a fakeout. Related Reading: XRP Exhibits Bearish Chart Pattern – Where Could The Price Head Next? Bitcoin On The Brink With Massive Amount Of Liquidations Looming Bitcoin has been facing a lot of turbulence recently, and the troubles don’t seem to be stopping anytime soon. The latest data shows that Bitcoin is facing trouble as over $100 billion in liquidations loom, signaling the potential for another crash in the cryptocurrency market. Despite attempting to surpass its nearest resistance levels, Bitcoin has been struggling, with the potential for further downside movements and increased selling pressure. According to the latest data provided by the trader and crypto analyst under the pseudonym “Bleeding Crypto”, there is a total of $63.9 billion worth of liquidations at the $24,200 price level and $52.3 billion worth of liquidations at the $21,800 mark. The increased selling pressure in Bitcoin could potentially result in further liquidations and a subsequent crash in the cryptocurrency’s price, delaying any further uptrends and causing a return to the lower price levels seen at the beginning of the year. This could induce fear among investors, further fueling short positions and potentially leading to a vicious cycle. However, if that’s the case, it’s important to note that there’s also a possibility of a contrary situation, where institutional investors hunt for short position liquidations, leading to a surge in buying pressure and propelling the price of Bitcoin to the upside. BTC’s Open Interest Skyrockets Crypto analyst and Crypto Quant author Maartun has recently warned that volatility is incoming in the world of Bitcoin. According to him, although BTC’s price has been going sideways, the open interest in the cryptocurrency has increased by $439 million. Maartun’s analysis suggests that a significant amount of money is being poured into the market, which could lead to a significant increase in volatility. Maartun notes that this situation differs from previous occasions, as the funding rates for Bitcoin are trending down and are close to neutral. This means that longs and shorts are in almost perfect balance, creating a situation where any significant move in either direction could trigger a cascade of buying or selling. Open interest refers to the total number of outstanding contracts in a particular market yet to be settled. In the case of Bitcoin, an increase in open interest typically indicates that more traders are entering the market, which could lead to increased volatility. The impact of the increase in open interest on Bitcoin’s price and market direction is unclear. While an increase in open interest can suggest a growing interest in Bitcoin and potentially lead to upward price movements, it can also lead to greater volatility and downward price movements if the market sentiment turns negative. Alternately, according to the latest data from Glassnode, the amount of illiquid Bitcoin supply continues to grow at a rate of 119,000 BTC per month. This suggests that Bitcoin holders are becoming increasingly reluctant to sell or move their coins, leading to a concentration of coins in wallets with a sparse spending history. Related Reading: Ethereum Plunges Below $1,700, Here’s The Metric That Signaled This In Advance This is an important trend to watch, as it suggests that Bitcoin holders remain confident in the long-term potential of the cryptocurrency. Featured image from iStock, chart from TradingView.com
