Analyst Predicts Significant Bitcoin Futures Liquidations on the Horizon
Bitcoin has struggled to regain its momentum after recent price fluctuations, and it appears that the cryptocurrency could face further downward pressure due to the bullish sentiment of investors. The price of Bitcoin plummeted from $62,000 to $53,300, shocking the crypto market and resulting in $263 million worth of long liquidations in the futures market over the course of three days. This level of liquidation is the second highest in the past two weeks, with the previous peak occurring three months ago in April. Normally, such high liquidations would lead to a cooling off period, but BTC holders are not inclined to follow this trend. Instead, they expect a swift recovery and are prepared to profit from it. Analyst Willy Woo believes that this bullish sentiment, coupled with the buying of futures contracts, could lead to further losses. The Bitcoin Open Value Oscillator indicates that there are still approximately half a million long contracts open in the futures market. If Bitcoin’s price continues to decline, these positions could be liquidated, resulting in an extended bearish period for BTC. At the time of writing, Bitcoin is trading at $56,961, stabilizing after nearly hitting $53,300. However, there is an expected 17% drawdown forecasted due to a double top formation four months ago, which could drive the price down to $50,900 and trigger significant long liquidations. If Bitcoin manages to bounce back and regain support at $55,000, there is potential for recovery and a rise to $60,000, which would invalidate the bearish outlook.