- Increasing calls for an online market bottom helped BTC bounce back after a dip below $60,000.
- The next target for Bitcoin could be $64,600 or $58,150 depending on the upside or downside pressure.
Bitcoin [BTC], the cryptocurrency with the largest market cap, briefly fell below $60,000 on June 24. This was the first time since May 3 that the currency reached such a level.
However, it didn’t take long for BTC to recover. At one point, AMBCrypto found Bitcoin reaching $62,814 while the broader market was expecting higher prices.
But that didn’t happen as the value changed hands at $61,107 at the time of writing. Before Bitcoin’s price fell to $58,890, traders in the derivatives market expected this move.
Strong hands send BTC up again
The reason for this is that the currency experienced a heavy sell-off by the German government on June 19.
The negative sentiment worsened after it was confirmed that Mt.Gox, the former crypto exchange, would distribute $8.6 billion worth of BTC to its creditors by July.
This development sent shockwaves through the spine of market participants, with many suggesting weaker conditions for BTC.
Meanwhile, AMBCrypto found that increased calls for the “bottom” on social media were part of what caused Bitcoin to bounce. The image below obtained van Santiment confirmed this.
Source: Santiment
Historically, when social volume and bottom call dominance peak, it leads to a significant recovery. That was what happened before with BTC.
But will the currency bounce back if it erases some of these gains? Let’s find out.
To do this, AMBCrypto examined Bitcoin’s Liquidation Heatmap. This indicator predicts prices at which serious liquidations may occur.
Data shows that volatility is not over yet
Moreover, the high level of liquidity suggests that prices could move in that direction. At the time of writing, we noted high liquidity of $64,600 based on Hyblock data. If spot buying pressure increases, BTC could reach this level.
If that were to happen, many short positions in the market could be liquidated. The downside was that there was still a liquidity cluster at $58,150. This means that if selling pressure increases, Bitcoin could fall back below $60,000.
Source: Hyblock
Additionally, BTC contracts have been liquidated in the last 24 hours reaches $152.71 million, according to Coinglass data. Liquidation occurs when a trader can no longer meet the margin requirements to keep a position open.
As a result, an exchange closes the position to prevent further losses. For Bitcoin, the high volatility in the market caused the cascade of liquidations.
Notably, the long position was the biggest casualty, with $121.65 million wiped out in 24 hours. Shorts, on the other hand, accounted for $31.06 million.
Source: Coinglass
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Shorts are traders who predict that prices will fall. However, long are traders who are betting that prices will rise.
Moving on, traders may need to be cautious as BTC’s short-term direction remains risky.