$307 Million Liquidated as Bitcoin Breaks Below $58K
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Highlights:
- Bitcoin price fell below $58,000, the lowest since May.
- Altcoins like Ethereum and Solana faced over 5% declines; widespread liquidations totaled $307M.
- The upcoming Mt. Gox’s BTC distribution, underperforming spot BTC ETFs, and miners’ sales are driving Bitcoin’s recent price decline.
The price of Bitcoin (BTC) fell below $58,000 on Thursday, currently trading at $57,924, according to CoinMarketCap. The world’s largest cryptocurrency has shed 4.58% in the last 24 hours to reach its lowest levels since early May, despite market expectations of a price rebound.
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Altcoins such as Ethereum, BNB, Cardano, XRP, and Toncoin have also fallen by more than 5%. Meanwhile, Solana ecosystem tokens, AI coins, and meme coins have experienced a double-digit drop in the last 24 hours.
More than $307M Liquidated in the Past 24 Hours
According to data from Coinglass, over $307 million worth of leveraged positions have been liquidated on centralized crypto exchanges (CEXs) over the past 24 hours. Over $275 million in longs and $31 million in short positions have been liquidated. This widespread liquidation activity has affected 111,631 traders. Most liquidations happened on Binance and OKX, with $123 million and $95 million, respectively.
Bitcoin saw liquidations totaling $94 million, with $81 million from long positions and $12 million from short positions. The second-largest crypto, Ethereum (ETH), also witnessed a 5.70% downturn over the past day — now trading at $3,163. ETH recorded liquidations amounting to $71 million, comprising $65 million from long positions and $6 million from short positions.
Solana’s SOL fell 10.08% to trade at $134, while Dogecoin (DOGE) dropped over 8.21%. Dogecoin and Solana saw the liquidation of $5 million and $13, respectively, in the past 24 hours. Currently, the entire crypto market cap stands at $2.14 trillion, reflecting a 5.26% decrease over the past 24 hours.
Top Reasons Behind Bitcoin’s Price Drop
Mt. Gox Token Distribution
A major factor contributing to Bitcoin’s price drop is the impending distribution of nearly $9 billion worth of BTC by the defunct Mt. Gox exchange. The company will distribute around 140,000 Bitcoins to its creditors in July. There is a concern that they might sell off a significant portion of their BTC holdings, which could further impact Bitcoin’s price.
Given that the price of Bitcoin was approximately $600 when Mt. Gox collapsed, these creditors stand to make substantial profits. This could put additional pressure on the crypto market.
Miners Selling Off Bitcoin
Since Bitcoin’s halving event on April 19, which reduced mining rewards by half, the cryptocurrency has shown signs of miner capitulation. Miners are likely shutting down less profitable machines and selling Bitcoin to hedge their exposure.
According to the CryptoQuant report, total daily revenues for miners have dropped from $79 million on March 6 to $29 million currently. Since Monday, the miners have offloaded over $150 million worth of Bitcoin on exchanges.
Bitcoin miner revenue plummets to $29M amid rising capitulation
According to CoinDesk, referencing CryptoQuant data, Bitcoin miner capitulation metrics are nearing the lows observed after the FTX Exchange crash in late 2022. Daily miner revenue has decreased from $79 million to…
— CoinNess Global (@CoinnessGL) July 3, 2024
Weak Performance of Spot BTC ETFs and Anticipated Listing of Spot ETH ETFs
The 11 US-based spot Bitcoin ETFs have experienced significant fluctuations in cash flows recently. On Wednesday, these funds saw total daily net outflows of $20.45 million. Only two funds had net flows, while the remaining funds recorded zero flows. Grayscale’s GBTC had daily net outflows of $26.99 million, while Fidelity’s FBTC saw net inflows of $6.55 million.
The approved listing of spot Ethereum ETFs is expected to occur this month, which will put the altcoin market in a higher spotlight. Additionally, Bitcoin dominance showing a reversal pattern may drive more crypto investment towards altcoins. K33 analysts predict that the launch of spot ETH ETFs will boost ETH performance compared to BTC.
Governments are selling into the summer, while open interest in ETH is surging towards record levels with the ETF launch drawing near.https://t.co/PdJIFeikbT
— K33 Research (@K33Research) July 2, 2024
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