Bitcoin Liquidations Hit $100 Million as Prices Fall: Are ETF Investors Likely to Sell Off?

In the last 24 hours, Bitcoin saw over $100 million in leveraged liquidations, stirring fears of a possible retreat to the $50,000 level.

Data from CoinGlass shows that Bitcoin liquidations totaled $100.4 million, including $86 million from leveraged long positions.

A three-day downtrend has brought Bitcoin’s price down from above $62,000 on July 2 to a low of $57,043 at 9:22 AM UTC on July 4, per CoinMarketCap.

As of 9:40 AM UTC, Bitcoin had recovered slightly to over $57,800, though it was still down by more than 4.5% on the day.

Bitcoin falls below ETF buyer realized price, but ETFs aren’t panic selling (yet)

A key observation is Bitcoin’s dip below the average purchase price of spot Bitcoin ETF investors, at $57,979. This price point is a crucial support level for analysts.

Despite this, ETF investors have remained calm, with only $20.5 million in net outflows recorded on July 3, mainly driven by $27 million from Grayscale’s ETF, according to Farside Investors.

However, the potential for a broader sell-off remains, especially as U.S. investors return after the July Fourth holiday.

Adding to the potential sell pressure are the forthcoming Mt. Gox creditor repayments. Early July is expected to see the distribution of over $9.4 billion in Bitcoin to 127,000 creditors, concluding a decade-long wait.

Bitcoin correction or temporary “shakeout”?

After the recent price decline, Bitcoin has breached its 200-day moving average for the first time in ten months, signaling a possible delay in a bullish breakout until it can surpass the downtrend that began in early June. Crypto analyst Rekt Capital noted on July 3:

“Breakout postponed due to a failed retest of the June Downtrend as new support. This is still the trendline to watch for a shift in the trend going forward nonetheless.”

Despite this, some market observers view the recent drop as a potential “shakeout,” where a sudden dip in prices is quickly followed by a recovery, according to insights from Bitcoin investor Elja Boom on July 4.

However, 10x Research analysts caution that Bitcoin might revisit the $50,000 level if selling pressure increases.

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