BTC Price – Spot Exchange Inflows Amplify Bitcoin’s Decline Amidst Selling Pressure
BTC Price – Bitcoin (BTC) is facing difficulties in reclaiming the $60,000 level as the market experiences significant turmoil. Recent data from CryptoQuant highlights key factors contributing to the ongoing price decline, leaving traders uncertain about the market’s direction.
Short-Term Holders Take Profits at Break-Even
CryptoQuant reports that Bitcoin’s drop below $60,000 is partly due to short-term holders selling their assets at break-even prices. These holders, who had previously incurred a 17% loss, took advantage of a brief price recovery to exit their positions, adding to the recent selling pressure.
Rising Open Interest and Positive Funding Rates
Open interest in Bitcoin perpetual contracts has surged by 31% since August 5, reaching $17.9 billion. This increase indicates growing market participation, but also contributes to market volatility. Positive funding rates, where long positions pay short positions, reflect high demand but can destabilize positions in a speculative market.
Increased Spot Inflows Add Selling Pressure
Research shows that increased Bitcoin inflows into spot exchanges have further pressured the market. Large holders transferring BTC to exchanges are often seen as signaling intent to sell, exacerbating the downward trend. This influx of sell orders contributes to the overall decline in Bitcoin’s price.
Liquidations of Weak Hands
Recent market conditions have led to significant liquidations, particularly among weak hands. Ethereum and Bitcoin longs faced liquidations totaling $55 million and $90 million, respectively, the highest since August 5. This trend has added to the market instability.
Bitcoin’s Current Position
As of now, Bitcoin is trading at $59,118, down nearly 5% since the start of the Wednesday session. The combination of profit-taking, rising open interest, increased spot inflows, and liquidations has created a volatile environment, with the market sending mixed signals about the future.
FAQ on Recent BTC Price Drop
What caused Bitcoin’s recent drop below $60,000?
Bitcoin’s recent drop below $60,000 is attributed to several factors, including profit-taking by short-term holders, increased open interest in Bitcoin perpetual contracts, and rising spot inflows. The surge in activity was linked to the launch of the DOGS memecoin, which added significant pressure on the network and contributed to the volatility.
How did short-term holders impact Bitcoin’s price?
Short-term holders of Bitcoin established a resistance wall at their break-even price, leading to profit-taking. As the price rebounded to their purchase levels, these holders sold their positions, contributing to the recent price drop.
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