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Why Bitcoin Falls To $58K Today; Further Decline Ahead?

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Bitcoin price declined below the $59,000 mark today, sparking concerns in the broader crypto market. Amid the downturn trend in BTC price, several other major cryptos like Ethereum, BNB, and others, also witnessed a significant dip.

However, amid the recent dip, investors are looking for potential reasons behind the dip. Besides, the discussions further intensify, especially after the recent pump in Bitcoin over the weekend.

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Why Bitcoin Slips To $60K Today?

The recent decline in Bitcoin price to $60,000 raised eyebrows across the cryptocurrency landscape. However, amid this, a new report by 10X Research sheds light on the key factors driving this sluggish performance in the flagship crypto.

Their report outlines that the weekend pump was likely a technical reset, alleviating oversold conditions in the short term. This reset paved the way for the downtrend to resume as longer-term technical signals point to a potential topping formation.

In addition, the report suggests that despite short-term bullish sentiments driven by factors such as U.S. Presidential Election tailwinds and anticipated interest rate cuts, these were overshadowed by deeper technical and structural concerns. Analysts from 10X Research highlight the significant role of on-chain signals, market flows- particularly from Bitcoin miners’ inventory, and market structure data in this downturn.

These factors collectively contributed to a bearish outlook for Bitcoin, outweighing temporary bullish influences. Besides, one crucial aspect noted was the impact of low trading volumes over the weekend.

During these periods, even modest buying activity can trigger stop orders, leading to liquidations and amplifying price movements. This phenomenon was evident in the recent weekend’s upward surge, which swiftly turned into a correction as the upside risk from short covering diminished and downside pressures took hold.

Also Read: Fidelity & Sygnum Taps Chainlink For Tokenized Asset Data

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What’s More?

Another significant driver of Bitcoin’s price decline is the impending expiration of substantial Bitcoin and Ethereum options. Data from Deribit indicates that Bitcoin options with a notional value exceeding $1.04 billion are set to expire on July 5, with a put/call ratio of 0.80 and a maximum pain price of $63,000.

Source: Deribit

On the other hand, Ethereum options worth $479.30 million, featuring a put/call ratio of 0.38 and a max pain price of $3,450, are also due to expire on the same date. These expiries are generating uncertainty, prompting traders to adjust their positions ahead of the deadline. The approaching expiry date increases market volatility, as participants hedge their bets and recalibrate strategies in response to the significant options contracts that are about to mature.

Source: Deribit

In addition, the July 2 outflow in the U.S. Spot Bitcoin ETF following a 5-day winning streak also weighed on the investors’ sentiment. According to recent data, the U.S. Spot Bitcoin ETFs recorded an outflow of nearly $14 million on Tuesday, following an influx of about $130 million in the prior day.

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Further Liquidation Ahead?

Several market experts appear to have remained bullish despite today’s slump. However, it’s worth noting that the liquidation warning from 10X Research as well as from other prominent analysts have weighed on the sentiment.

For context, Ali Martinez said that Bitcoin may recover from its current phase while revealing a warning. Martinez, while analyzing the Bitcoin Exchange Liquidation Map, said that BTC risks witnessing over $1 billion in liquidation if it reaches the $62,600 level.

Source: Ali Martinez, X

As of writing, Bitcoin price was down more than 3% and hovers near the $58,500 range. Its one-day trading volume rose 48% to $33.67 billion, while the crypto has touched a 24-hour high of $61,079.38. Furthermore, CoinGlass data showed a slump of more than 4% in Bitcoin Futures Open Interest from yesterday.

Also Read: Binance Announces Delisting Of Key Crypto Pairs, Brace For Market Impact

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Rupam Roy

Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam's expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news. Rupam's career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.

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