Dramatic long squeeze pushes bitcoin under $60.000
The recent drop in Bitcoin’s price to $60,000 was primarily driven by a “cascading long squeeze,” as detailed by Bitcoin analyst Willy Woo. This market dynamic emerged as more traders initiated long positions — bets on the price rising — which inadvertently set the stage for significant liquidations as the price instead fell.
A long squeeze occurs when investors in long positions sell off their holdings to cut losses, which can precipitate further declines as other long position holders do the same, exacerbating the downward trend.
This phenomenon was contrasted with a “short squeeze,” a scenario where the price of an asset like GameStop stock in January 2021 dramatically increased due to retail traders buying in large volumes, forcing those short-selling the stock to buy back at higher prices, thus driving the price up further.
Data from CoinGlass indicated that a dip below $60,000 could lead to the liquidation of $1.16 billion in long positions. Conversely, a 3.73% increase in Bitcoin’s price could potentially eliminate $2.18 billion in short positions, suggesting a market bias towards anticipating further price decreases.
Amidst these market movements, the Crypto Fear and Greed Index, which gauges market sentiment, hit its lowest level in nearly 18 months, reflecting widespread investor apprehension.
Additionally, Willy Woo highlighted the ongoing issue of “post-halving miners’ capitulation.” This term refers to the tendency of miners to sell off their Bitcoin holdings and possibly cease operations when the profitability of mining drops below a viable threshold after Bitcoin’s reward halving, which reduces the reward for mining new blocks.
Source: Cointelegraph
Memecoins outpace bearish trends with robust double-digit gains
In the recent market activities, memecoins have shown a surprising resilience, reversing their previous bearish trends and recording notable double-digit growth.
This market rebound comes despite Bitcoin struggling to gain bullish momentum, hitting a monthly low of $58,554 on June 24. In contrast, many memecoins have quickly shifted from being significant losers in the red crypto market to achieving substantial gains.
Among these, Dogecoin showed a modest increase of 2.4% over the past 24 hours, while Shiba Inu experienced a slight gain of 0.15%. However, the most significant growth was seen in newer memecoins like Solana-based Popcat (POPCAT) and Mog Coin (MOG), which surged by 50% and 39%, respectively.
Dogwifhat (WIF), another memecoin that previously reached a market cap of $4 billion earlier in the year, also demonstrated a strong recovery. After hitting a multi-month low of $1.47, WIF surged over 25% to recover most of its recent losses, trading around $1.83.
Additionally, Pepe, another top 50 crypto by market cap, rose by 13% in 24 hours, alongside other popular memecoins like Floki (FLOKI) and Bonk (BONK), which also posted significant gains.
This resurgence of memecoins not only shifts the market dynamics but also brings them back into the spotlight, countering narratives that the memecoin frenzy might be over following the recent market dips.
Source: Cointelegraph
German Authorities Transfer $24 Million Worth of Bitcoin to Coinbase and Kraken
The German government recently conducted significant Bitcoin transactions involving large amounts of the cryptocurrency, demonstrating notable activity in the crypto space. This movement involved transferring Bitcoin to exchanges such as Coinbase and Kraken. According to Arkham Intelligence, a substantial amount of Bitcoin valued around $2 billion, previously seized by the U.S. Department of Justice from the Silk Road dark web market, was involved in these transactions. The transferred Bitcoins were part of a larger batch that had been under the control of the DOJ following legal proceedings that solidified the forfeiture of these assets.
The activity includes initial small test transactions, likely to ensure the security and functionality of the transfer process before moving larger amounts. These test transactions were followed by larger transfers to Coinbase Prime, signaling a potential preparation for selling or managing the assets through the exchange. This kind of movement is significant as it not only involves large sums but also indicates possible strategies by government bodies in managing seized digital assets.
Furthermore, these transactions come at a time when the cryptocurrency market is continuously evolving, with significant interest from governmental and regulatory bodies in how to manage and leverage such assets. The transfers are particularly noteworthy due to the scale and the implications they have for market liquidity and regulatory actions in the cryptocurrency space.
Source: The Block