Bitcoin Slips Back Below $57,000 as Short-Term Holders Threaten Volatility

Bitcoin Slips Back Below $57,000 as Short-Term Holders Threaten Volatility

Bitcoin failed to hold levels above $58,000 Thursday morning, slipping to $56,700 and trading flat on the day.

Per data from CoinGecko, the price of Bitcoin is currently $56,794, up 0.6% in the past 24 hours and down 4.7% on the week.

Even as Bitcoin dropped to a little below 20% under its all time high, a new analysis has revealed a growing growing risk factor in the crypto market—short-term holders who are currently underwater on their investments could potentially trigger significant market volatility if they decide to cut their losses.

Despite the average Bitcoin investor remaining in a profitable position, those who have recently entered the market or acquired Bitcoin in the last six months are facing substantial unrealized losses. This dynamic creates a potentially volatile situation that could impact the broader crypto market.

“The Short-Term Holder cohort remains heavily underwater on their holdings, making them a source of risk for the time being,” a report by blockchain intelligence firm Glassnode states. This group’s financial stress is evident in key metrics, with their unrealized losses dominating the overall market picture.

The report cautions that this overall stability could be disrupted if short-term holders decide to exit their positions en masse. The $51,000 price level is identified as a critical support that must be maintained to preserve the current market structure.

The average cost basis for these investors ranges from $59,000 to $65,200, significantly above the current market price.

This situation is reminiscent of the choppy market conditions seen in 2019, rather than a full-scale bear market, the report’s authors noted. However, it still presents a considerable risk.

“Until the spot price reclaims the STH [Short-Term Holder] cost basis of $62.4k, there is an expectation for further market weakness,” the report stated.

The implications of this stress on short-term holders extend beyond their individual positions. Their potential selling pressure could trigger broader market volatility, especially given the current low levels of overall profit and loss-taking activities.

Interestingly, while short-term holders grapple with losses, long-term investors appear to be in a more stable position.

The report indicates that long-term holders have slowed their profit-taking activities, and coins accumulated during the recent all-time high run-up are gradually maturing into long-term holdings.

 

Source: https://decrypt.co/248179/bitcoin-price-flirts-with-55000-as-etfs-see-seventh-day-of-outflows

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Crypto Liquidations Top $1 Billion After Bitcoin Dives Below $50K

Crypto Liquidations Top $1 Billion After Bitcoin Dives Below $50K

The cryptocurrency market experienced a seismic shock in the past 24 hours, with total liquidations surpassing $1.06 billion and affecting 278,480 traders.

This market meltdown, characterized by a stark imbalance between long and short positions, saw long liquidations reaching a staggering $902 million, while short liquidations stood at $160 million, according to CoinGlass data.

The single largest liquidation in the past day has been a $27 million position on Huobi, according to Coinglass.

Bitcoin (BTC), the flagship cryptocurrency, plummeted to a low of $49,647 during early European trading hours before slightly recovering to $52,900, still down 12.5% compared to this time yesterday.

Ethereum (ETH), the second-largest cryptocurrency, faced an even steeper decline, dropping 19.5% to $2,345 after touching a low of $2,111, according to TradingView data.

The carnage wasn’t limited to the top two cryptocurrencies.

The broader altcoin market experienced significant losses, with Solana (SOL) and BNB (BNB) down 13% and 16% respectively, Dogecoin (DOGE) plunging 18%, and XRP falling 15%.

Global Economic Factors at Play

Anndy Lian, an intergovernmental blockchain expert, attributes this downturn to the increasing interconnectedness between traditional financial markets and cryptocurrencies.

“There is a growing connection between traditional financial markets and cryptocurrency markets, meaning that disruptions in one can lead to instability in the other,” Lian told Decrypt.

He pointed to recent developments in the U.S. economy as a primary catalyst.

“The unemployment rate increased to 4.3% from the previous 4.1%. This unexpected rise has heightened fears of a potential recession, causing investors to worry that the Federal Reserve may be slow to respond with interest rate cuts,” Lian stated.

The ripple effects were felt across various sectors.

The MSCI US Index, a market-capitalization weighted index that tracks large- and mid-cap segments of the U.S. equities market, dropped by 1.8% last Friday, with the consumer discretionary sector performing particularly poorly, falling by 4.3%. This weakness underscores growing concerns about consumer spending and economic growth.

Bleak Outlook for Bitcoin

10x Research provided a grim forecast for the crypto market.

“Although Bitcoin has been in a gradual downtrend, marked by three tops and two bottoms, we anticipate the support line at $55,000 will break, potentially driving prices down to $42,000. In such a scenario, Ethereum could drop below $2,000,” they stated.

The research firm cited economic weakness, ongoing weak market structure, on-chain data, and cycle analysis as factors supporting their bearish outlook.

Meanwhile, Tristan Dickinson, CMO of Bitcoin scaling solution exSat Network, highlighted the impact of global events on the crypto market.

“Bitcoin isn’t immune to global macro events. The 12% plunge in the Nikkei, coupled with dismal performances from the Dow Jones, S&P 500, and Nasdaq, is fuelling global recession fears,” Dickinson told Decrypt.

He also pointed to the “very real threat of global conflict” as an additional factor unsettling investors.

Dickinson added a note of caution regarding the coming months: “August and September are historically weak months, suggesting potential sideways movement and further tests of Bitcoin’s support levels.”

 

Source: https://decrypt.co/243123/crypto-liquidations-top-1-billion-after-bitcoin-dives-below-50k

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Anndy Lian comments on NFT sales falling below US$1 billion | 3AC files for bankruptcy | Stablecoins

Anndy Lian comments on NFT sales falling below US$1 billion | 3AC files for bankruptcy | Stablecoins

This video is featured on The Daily Forkast, July 4th, 2022, presented by Joel Flynn for the latest in blockchain & crypto news. The following were highlighted:

Monthly NFT sales fall below US$1 billion for the first time in a year. (https://forkast.news/monthly-nft-sales-below-1billion-12-months/)

Meanwhile, Three Arrows Capital files for Chapter 15 bankruptcy in the US.
(https://forkast.news/headlines/three-arrows-capital-chapter-15-bankruptcy/)

Sam Bankman-Fried’s FTX doubles down on BlockFi bailout.
(https://forkast.news/headlines/blockfi-deal-sam-bankman-fried-ftx-clients/)

And finally, experts weigh in on the future of stablecoins.

Experts who commented on this video include:
Anndy Lian, Chief Digital Advisor, Mongolian Productivity Organization
Annabelle Huang, Managing Partner, Amber Group
Jason P Gottlieb, Chair of Digital Assets, Morrison Cohen
Trent Barnes, Principal, Zerocap

00:37 – Monthly NFT sales fall below US$1 billion for the first time in a year.
03:12 – Three Arrows Capital files for Chapter 15 bankruptcy in the US.
04:00 – Sam Bankman-Fried’s FTX doubles down on BlockFi bailout.
09:23 – Experts weigh in on the future of stablecoins.

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Original Source: https://forkast.news/video-audio/crypto-winter-hits-nfts-three-arrows-capital-files-for-bankruptcy/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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