The world of cryptocurrency is on tenterhooks, thanks largely to well-known analyst Crypto Rover waving a conspicuous red flag. His sobering prediction foresees an impending “liquidation event” that looks set to impact those holding Bitcoin short positions adversely.
The prediction rests on Bitcoin’s current phase of significant consolidation, which, as Rover lays out, hints at a grim scenario. The potential fallout? A whopping $3 billion in short positions could be in line for liquidation if Bitcoin manages to claw its way back up to a specific price point.
The critical number to have in our sights, according to Rover, is the $71,600 landmark. This is where we might expect the seismic $3 billion short liquidation to take place, that is, if Bitcoin can reclaim and hold on to this position. Rover’s prognosis is founded on data pulled from the esteemed derivative market tracker CoinGlass, which points to a considerable accumulation of liquidity nesting at these hiked price points.
The cautionary bulletin from Crypto Rover takes the stage amid a period fraught with volatility in the cryptocurrency market. It is characterized by swiftly fluctuating pricing landscapes alongside a surge in trading activity.
Bitcoin, in particular, is not immune. A sudden dip during the past weekend drove the price down in dramatic fashion reaching a low of $62,000. But, come the wee hours of Monday morning, Bitcoin hinted at a recovery, albeit briefly, peaking at a notable $66,797, before reverting to its current plateau of $64,711.
The market wobble over the weekend was distinguished by a record number of liquidations. According to WhaleWire, in a mere day, we saw over $1.2 billion in Bitcoin long positions meeting their untimely demise. This staggering figure not only smashes past records but underscores the current market unease. As an illustration, to date, more Bitcoin bulls have been liquidated than at any point over the past 15 years.
As per the most recent data from Coinglass, the trend shows no signs of slowing down. A staggering 89,151 traders have been detracted from the market due to liquidations in just the last 24 hours, racking up total losses of $266.10 million.
It worth pointing out, however, that amid the wreckage, Bitcoin’s shored up some minor gains. This consolation prize comes hot on the heels of Hong Kong regulators provisionally giving the green light to asset managers to kickstart spot Bitcoin and Ethereum exchange-traded funds (ETFs)
Crypto connoisseur Willy Woo has weighed in to provide some insight into the potential market shakeup. According to his analysis, the introduction of new Bitcoin ETFs could instigate ambitious price targets, looking as far as $91,000 at the base of the bear market, scaling up to $650,000 at the summit of the bull market.
As Woo outlines, there is an uptick in BTC interest among institutional investors, which will likely see asset managers diverting a substantial chunk of their funds in Bitcoin’s direction. However, according to Woo, these projections should be considered conservative at best. If more capital gets funneled into Bitcoin, the cryptocurrency’s market capitalization might even outstrip gold.
