Bitcoin experienced a significant price drop of more than 2% on July 4, breaking through the critical support line of $58,000 for the first time since October 2023. Data from TradingView recorded new local lows of $57,885 on Bitstamp following the latest daily close.
Spot Market Selling Contributes to Downturn
A lack of positive sentiment coupled with steady selling from spot markets has created challenging conditions for Bitcoin bulls. CoinGlass reported nearly $60 million in Bitcoin long liquidations within a 24-hour period, highlighting the selling pressure.
Popular trader Skew pointed out that BTC/USD had crossed its 200-day moving average (MA) for the first time in 10 months, noting, “So far since trend rejection & reversal around $63.8K spot selling has been the main driver of this trend.” He emphasized the need for market demand and reversal signs for the 200-day MA to act as a systematic trigger. The 200-day MA was positioned at $58,400 at the time of writing, still slightly below the spot price after a minor bounce.
$BTC 4H
First test of 200D MA since oct 2023 reclaim (pre – ETF)so far since trend rejection & reversal around $63.8K spot selling has been the main driver of this trend
so in order for this HTF MA to actually act as a systematic trigger for the market we need to see market… pic.twitter.com/FuW3A48mnJ
— Skew Δ (@52kskew) July 4, 2024
Potential for Further Downside
Zooming out, trading suite DecenTrader identified a significant amount of long liquidations closer to $50,000, suggesting that further price breakdowns could target the $51,000-$52,000 range. Conversely, shorts liquidity lies at $76,000-$78,000, indicating potential upward resistance.
*If* Bitcoin does breakdown then $51k – $52k remains the area where there is a significant amount of 3x, 5x, and 10x longs liquidity.
To the upside, the shorts liquidity is at $76k-78k. pic.twitter.com/70iCqSUai1
— Decentrader (@decentrader) July 3, 2024
Year-Long Sell-Side Pressure
Charles Edwards, founder of Capriole Investments, highlighted that the top cryptocurrency by market cap has faced considerable sell-side pressure throughout 2024, with data from Glassnode supporting this observation. Edwards noted that United States spot Bitcoin exchange-traded funds (ETFs), which launched in January, have been unable to absorb this selling pressure. “This is why we haven’t mooned yet. Saylor, Michael Dell, ETFs. It’s all noise,” he commented on X, referencing net flows equivalent to $24 billion being dumped on the market this year.
This is why we haven't mooned yet.
Saylor, Michael Dell, ETFs. It's all noise.
When you look at the data of the 4 most important players in Bitcoin, we have net flows equivalent to $24B being dumped on the market in 2024. pic.twitter.com/Nf5FXq9SDb
— Charles Edwards (@caprioleio) July 4, 2024
Edwards stressed that ETFs are not the only demand in the current market, implying that other factors are also at play in Bitcoin’s price dynamics.
