Bitcoin Traders Book $200M Losses as BTC Price Hits 130-Day Low

BTC Price Analysis:

Bitcoin price dipped 5% within the daily timeframe on July 5, to hit a 130-day bottom of $53,512, market data shows that bull traders are closing out their BTC LONG positions in fears of further downside ahead of the US labor market data scheduled to be released on Friday.

Bitcoin Price Dips 16% Amid $500M LONG Liquidations

After a promising start to the week, bears further tightened their grip on the crypto markets on July 5 as BTC price declined 5% within a frenetic 24-hour period.

As previously reported by FXEmpire the ongoing Bitcoin price downtrend has been largely attributed to coordinated sell-offs from the US and Germany authorities, as well as payouts to the defunct Mt. Got exchange creditors.

The chart above shows how Bitcoin price action has set 2 new bearish records as dipped to 130-day low of $53,512 on Friday. Firstly, it means that BTC is now trading 10% below its 200-day moving average of $58,330. And more importantly, it has now declined by more than 15% within the 5 days of July.

Looking beyond the price charts, recent trends in the Bitcoin derivatives markets suggest the accelerated BTC price downswings are being triggered by over-leveraged speculative traders.

Bitcoin LONG contracts worth over $200 million have been liquidated over the last 24 hours, according to CoinGlass data. Meanwhile the total crypto market LONG liquidations reached $646 million, as bearish headwinds from Mt. Gox impending BTC sell-offs spread across to other altcoins.

Notably, this represents the largest single-day wipeout for the crypto market since mid-April.

It comes as the price of Bitcoin fell to as low as $55,000 late Thursday. The asset has since clawed back some losses to around $55,550, at the time of writing at 12 noon GMT on July 5, CoinGecko data shows.

Looking ahead, Bitcoin could struggled to regain a footing above $60,000, especially if hawkish US labor market data further tanks investor confidence in the days ahead.

BTC Price Forecast: $55,000 Support at Risk

Bitcoin’s price recently plunged to $55,000, its lowest point since late May, triggering concerns about further declines. As of noon GMT on July 5, Bitcoin has marginally recovered to $55,550, according to CoinGecko. However, the bearish sentiment looms large, suggesting potential difficulties in maintaining this level.

The chart reveals a significant resistance level around $58,540, which aligns with the 200-day simple moving average (SMA). This resistance has historically acted as a strong barrier, and Bitcoin’s recent failure to breach it indicates continued downward pressure. If Bitcoin cannot close above this level, the selling pressure may intensify.

Moreover, the $55,000 support level is crucial. A break below this threshold could accelerate the decline, with the next support levels at $53,000 and $50,000. The Fibonacci retracement levels suggest potential supports around $52,000, but the overall trend remains bearish as long as Bitcoin trades below the 200-day SMA.

In conclusion, Bitcoin faces a challenging road ahead. Maintaining support at $55,000 is critical, but the prevailing bearish momentum and strong resistance levels suggest a potential for further downside. Investors should brace for increased volatility, especially if negative market catalysts, such as unfavorable economic data or regulatory news, arise.