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Bitcoin Breaks Through the Level
Bitcoin fell below $60,000 for the first time since autumn 2024, according to data from the Binance platform. Since reaching a peak of $126,000 last October, Bitcoin briefly lost more than half of its value, Bloomberg notes. Traders are convinced that the correction will not end soon. On Polymarket, bets that the leading cryptocurrency will fall to $55,000 by the end of the year reached a record 65%. The large-scale sell-off also affected other instruments, with many altcoins losing up to 40% of their value in 24 hours. Ethereum, the second-largest cryptocurrency by market capitalisation, gave up all of its annual gains.
Vladimir Ulyanov, head of the analytical centre at Zecurion, links such a significant market move to speculators exiting the market:
“Even without a significant news backdrop, an attempt to break through the level may intensify investors’ negative expectations. Just a few days ago, Bitcoin, Ether and many other cryptocurrencies approached support zones. If the level is broken, the next reference points may be only lower round-number levels. For example, a decline from $60,000 to $50,000 would mean a very substantial fall in prices. That is why investors are not prepared to hold positions. If the price consolidates below support, the move could continue towards $55,000 and lower, unless the market is supported by positive news.
When market participants see that major players are beginning to reduce their positions, even in small volumes, this often triggers a wave of sell-offs. At such moments, volatility rises sharply, and prices can move noticeably even on relatively small trading volumes.”
Over the past 24 hours, crypto exchanges liquidated the positions of almost 300,000 traders worth more than $1 billion, according to CoinGlass. Of that amount, more than $900 million came from long positions betting on price increases. More than $650 million was linked to the Bitcoin and Ethereum markets. Against this backdrop, Bloomberg described the situation as “the worst crypto winter in history”. One of its triggers was the sale of Bitcoin by the largest corporate holder of the tokens, Strategy Inc, says Nikita Zuborev, senior analyst at Bestchange.ru:
Bitcoin Could Not Withstand the Selling
“Strategy is a major company that had long been actively buying Bitcoin, while its CEO is considered one of the main supporters of the first cryptocurrency. However, due to a cash gap, the company had to sell part of its reserves — this involved only a few thousand Bitcoin.
In a market that was already under pressure because of general economic uncertainty, this became an additional negative signal and triggered a wave of liquidations that began to reinforce itself. The situation that has been developing in the crypto market over the past six months can already be regarded as one stage of a crypto winter. It is just that the correction now looks less dramatic than in previous cycles. It is difficult to predict how deep and prolonged this period will be, but market pressure is likely to persist for at least another year to a year and a half.”
Investor sentiment is also reflected in the Crypto Fear and Greed Index. Over the past 24 hours, it plunged from 20 to 15 points. Interest in AI technologies is also reducing the appeal of digital currencies, continues digital asset expert Sergey Pushkarev:
Cryptocurrencies Are Being Given Access to Exchanges
“There is indeed disappointment in the market. This is largely due to the rapid development of artificial intelligence: many technology assets are showing more impressive dynamics than most cryptocurrencies. In addition, part of the capital continues to leave the crypto market, which increases pressure on prices. High volatility, caused by geopolitical events and statements by politicians, also plays a role. In such a situation, investors prefer clearer and less risky assets. One of the signals was also the gold rally: many saw that good returns could be achieved even in conservative instruments. At the same time, the long-term positive outlook remains. The next Bitcoin halving is expected in about two years, and historically such cycles have often supported market growth.
Therefore, in the longer term, the chances of growth still appear more likely than a decline, although it is impossible to name exact timeframes.”
However, as Reuters notes, optimists still remain in the market. According to Geoffrey Kendrick, head of global digital asset research at Standard Chartered, Bitcoin’s price will reach $100,000 by the end of the year despite the “difficult” week. On the one hand, there are now fewer bullish bets left that could be closed. On the other hand, the analyst expects aggressive purchases from Strategy — the last time, after a sell-off, the company followed exactly that path.
See also: "Bitcoin Rebounds Above $61,000 After $1.6 Billion Sell-Off"
