Bitcoin drops to lowest level since June

Bitcoin drops to its lowest level since June 2023 forcing digital asset speculators to incur about $1 billion in digital assets.

Within this short span, as many as 176,374 traders have been liquidated, resulting in a loss of approximately $1.04 billion.

CoinGlass analytics reflect that roughly $821 million in long positions, indicative of traders wagering on upward market movement, have been wiped out due to the sudden and precipitous exit.

Of this, bitcoin traders are grappling with the most substantial losses, with long-term liquidations amounting to $472 million, followed by ether with $302 million.

Liquidation is a mechanism whereby exchanges close leveraged trading positions due to either partial or complete depletion of a trader’s initial or “margin” funds.

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Simultaneously, the cryptocurrency market’s decline aligns with the retreat of riskier global assets, as investors seek extended periods of higher yields.

The backdrop of these market movements has been further complicated by reports suggesting Elon Musk’s SpaceX may have been selling its Bitcoin holdings, fostering additional unease.

Speculation around SpaceX’s purported Bitcoin sales – an assertion yet to be substantiated – has arisen. In tandem, there are conjectures linking the market downturn to China Evergreen’s bankruptcy.

Bitcoin, experiencing a 10% loss, appears to be on track for its most substantial weekly decline in three months, having bottomed out at $25,314.

This depreciation stems from the previous day’s valuation of $28,947, with the ascent of global bond yields curbing the appeal of alternate investments like digital tokens.

Marking a notable milestone, Bitcoin’s market valuation has descended below $500 billion for the first time since June 16, reaching its lowest point since June 20.

The cryptocurrency market has been caught in a downward spiral since mid-July, coinciding with the surge of the US Dollar Index over the same period.

Historically, the anticipation of higher interest rates has prompted downturns in the cryptocurrency market, possibly explaining the decline on August 17.

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Factors influencing the market’s retreat include the persistent escalation of global interest rates, notably in the United States, where the 30-year Treasury note soared to 4.42%, marking its highest level since 2011.

Despite these challenges, market indicators suggest that the valuation of the crypto market is nearly oversold, with the daily Relative Strength Index (RSI) hovering around 34, slightly above the customary threshold.

Prominent investment research firm Fundstrat has ventured that the price of Bitcoin could potentially exceed $150,000 by the culmination of 2024, subject to the approval of the ongoing batch of Bitcoin spot exchange-traded funds (ETFs) in the United States.