Key Takeaways
The price of Bitcoin fell from its daily opening of $63,324 to a daily low of $60,571, losing 4% of its value. The amount of the decrease isn’t as significant as the fact that it approaches its most important horizontal threshold of $60,000.
There has been a liquidation of over $100 million in long positions. Miners are under pressure due to high breakeven costs following a halving event, which has led to a significant drop in their Bitcoin reserves to the lowest in 14 years.
In addition, earlier today, it was announced that Mt. Gox scheduled a repayment process for Bitcoin and Bitcoin Cash for Investors in early July 2024. All of this made a bearish sentiment that could bring the price of Bitcoin below $60,000.
Derivatives markets usually put additional pressure on the price, and liquidations in opposing directions further add to the momentum. That was the case today, as CoinGlass data shows that $102 million in long positions were liquidated in Bitcoin derivates.
This is the highest spike since May 1, when Bitcoin dipped below $57,000. The total number of liquidations is $306,155,873, making Bitcoin’s one-third. This turmoil could also hint at more decline as the day progresses.
After reaching a peak of nearly $74,000, Bitcoin entered a descending channel. On May 17, it broke out, climbing to $71,800 by May 21. Despite a fallback to $67,000 on May 31 and an attempt to regain momentum, it failed to surpass the $71,800 level again.
Following this second encounter with the $71,800 level on June 7, Bitcoin experienced a downturn. Moving forward, two possible scenarios emerge. Initially, the uptrend that started on May 1 could indicate an impending major rally, potentially setting a new all-time high.
If Bitcoin can bounce off the channel’s resistance and convert it into support, it may initiate the next bullish phase of a five-wave pattern, aiming to push past $78,000 upon completion of this wave.
On the other hand, if Bitcoin falls back into the descending channel, it could signal a bearish trend. The recent rise might then be interpreted as a mere corrective three-wave pattern from its all-time high, suggesting that Bitcoin is in a broad wave four correction, defined by WXY waves, with the recent lower high potentially marking the end of wave X. This scenario could lead to a decline towards $55,200.
The outcome largely depends on how Bitcoin interacts with the channel’s resistance at the crucial 0.786 Fibonacci level of $62,500.