Amid the ongoing fluctuations in the cryptocurrency market, Bitcoin’s price has risen 1.7% over the past 24 hours, hovering above the $62,000 mark.
Recent warnings from CryptoQuant, a leading crypto analytics platform, to suggest that Bitcoin could see a significant drop to $52,000 if specific key levels are breached.
This warning comes amid growing uncertainty in the Bitcoin derivatives market, with derivatives traders showing unprecedented caution compared to previous halving cycles.
Bitcoin risky level
CryptoQuant’s analysis highlights the declining open interest and funding rates in the Bitcoin derivatives market, indicating a “cautious” attitude among traders, especially with the arrival of several institutional participants. CryptoQuant analyst Shiven Moodley commented:
In this halving, derivatives traders are much more cautious than in previous cases. This season has seen the entry of numerous new institutional players into the market.
According to the analyst, if Bitcoin’s price falls below the critical support level of $60,000, the top cryptocurrency could experience a notable correction towards $52,000, indicating a potential bearish trend in the short term.
Inferred uncertainty
“If the price falls below $60,000, we could witness a drop to $52,000 before another increase.” – By means of @ShivenMoodley
Full post 👇https://t.co/XSBnfexbzZ
— CryptoQuant.com (@cryptoquant_com) April 18, 2024
However, the presence of institutional Bitcoin Spot ETFs could mitigate the severity of the decline by absorbing the “excess supply from liquidations” around the $60,000 support zone.
Moodley stated:
If the price falls below $60,000, we could witness a drop to $52,000 before another increase occurs. However, given the significant dominance of institutional ETFs, I wouldn’t be surprised to see excess supply from liquidations approach the short-term support level of $60,000.
Analysts are sounding the alarm about BTC’s vulnerable position
Meanwhile, crypto trader and analyst Ali has further fueled concerns by identifying a crucial price level for Bitcoin. Ali’s analysis indicates that if Bitcoin falls to $50,500, there could be more than $15 billion in liquidations on Binance alone.
#Bitcoin A drop to $50,500 will lead to more than $15 billion in liquidations #Binance only! pic.twitter.com/9wQTVwprgx
— Ali (@ali_charts) April 17, 2024
Such a significant liquidation event could put enormous pressure on the market, potentially leading to further price declines and increased volatility.
This outlook echoes recent warnings from prominent analyst Crypto Rover, who has also warned of a potential liquidation event that will hit shortholders if Bitcoin climbs back to the crucial price of $71,600.
Despite these concerns, some analysts remain optimistic about Bitcoin’s long-term prospects. Crypto analyst Plan B, known for its Stock-to-Flow (S2F) model, has done just that made bullish predictions for the future price movements of Bitcoin.
According to Plan B, Bitcoin’s upcoming Halving event will serve as a central driver of price increases, with the cryptocurrency expected to surpass $100,000 this year and surpass $300,000 by 2025.
Featured image from Unsplash, chart from TradingView
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