Amid continued fluctuations in the cryptocurrency market, the price of bitcoin has increased by 1.7% in the last 24 hours, rising above the $62,000 mark.
However, recent warnings from CryptoQuant, a leading cryptanalysis platform, twitter&utm_medium=sns&utm_campaign=quicktake&utm_content=shivenmoodley” target=”_blank” rel=”nofollow”>suggest that bitcoin could face a significant drop to $52,000 if specific key levels are breached.
This cautionary note comes amid growing uncertainty in the bitcoin derivatives market, with derivatives traders showing unprecedented caution compared to previous halving cycles.
bitcoin Risk Level
CryptoQuant analysis highlights declining open interest and funding rates in the bitcoin derivatives market, indicating a “cautious” stance among traders, particularly with the arrival of several institutional participants. CryptoQuant analyst Shiven Moodley noted:
In this halving, derivatives traders are showing much more caution than in previous cases. This season sees the entry of numerous new institutional players into the market.
According to the analyst, if bitcoin price falls below the critical support level of $60,000, the leading cryptocurrency could see a notable correction to $52,000, indicating a possible short-term bearish trend.
<blockquote class="twitter-tweet”>
Derived uncertainty
“If the price falls below $60,000, we could see a drop to $52,000 before a further rise.” – By twitter.com/ShivenMoodley?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>@ShivenMoodley
Full publication https://t.co/XSBnfexbzZ
– CryptoQuant.com (@cryptoquant_com) twitter.com/cryptoquant_com/status/1780889760841564369?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>April 18, 2024
However, the presence of institutional bitcoin Spot ETFs may mitigate the severity of the decline by absorbing the “oversupply of liquidations” around the $60,000 support zone.
Moodle stated:
If the price falls below $60,000, we could see a drop to $52,000 before a further rise. However, given the significant dominance of institutional ETFs, I would not be surprised if they accumulated excess supply from liquidations near the short-term support level of $60,000.
Analysts sound alarm on btc's fragile position
Meanwhile, cryptocurrency trader and analyst Ali has further fueled concerns by identifying a fundamental price level for bitcoin. Ali's analysis indicates that if bitcoin falls to $50,500, more than $15 billion in liquidations could occur on Binance alone.
<blockquote class="twitter-tweet”>
twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>#bitcoin Falling to $50,500 Will Cause More Than $15 Billion in Liquidations twitter.com/hashtag/Binance?src=hash&ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>#Binance only! pic.twitter.com/9wQTVwprgx
—Ali (@ali_charts) twitter.com/ali_charts/status/1780716502619988142?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>April 17, 2024
Such a major liquidation event could put immense pressure on the market, potentially leading to further price declines and increased volatility.
This outlook echoes recent warnings from prominent analyst crypto Rover, who also warned of a possible liquidation event that would hit short holders if bitcoin rises back to the crucial price of $71,600.
Despite these concerns, some analysts remain optimistic about bitcoin's long-term prospects. crypto analyst Plan B, known for his Stock-to-Flow (S2F) model, has x.com/100trillionUSD/status/1780586891735101653″ target=”_blank” rel=”nofollow”>made bullish predictions for future bitcoin price movements.
According to Plan B, bitcoin's upcoming Halving event will serve as a central driver for price increases, with the cryptocurrency expected to surpass $100,000 this year and surpass $300,000 by 2025.
Featured image from Unsplash, chart from TradingView
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