Analysts Eye $70K as Bitcoin Faces Pressure from October 10 Liquidation Event
Bitcoin recently fell to its lowest level since the elections in November 2024, trading just above $75,000. This represents a significant decline of 4.3% over the past 24 hours. Just days earlier, the cryptocurrency had peaked at an all-time high of $75,000 on October 6.
Impact of the October 10 Liquidation Event
Analysts cite the October 10 liquidation event as a major factor behind this decline in Bitcoin’s value. The incident involved Binance’s illiquid markets, which saw the liquidation of tens of billions of dollars in just one day. Alexander Blume, CEO of Two Prime, commented on the situation, indicating that this kind of selling pressure results in a liquidity crunch.
The total market capitalization of cryptocurrencies currently stands at approximately $2.6 trillion. This figure was notably higher at $4.2 trillion just before the October 10 liquidation episode. Blume remarked that despite the recent volatility in markets like gold and silver, Bitcoin failed to gain from any upward momentum during this time.
Current Trends and Predictions
- Bitcoin liquidations reached $758 million within the past 24 hours.
- Liquidations for the week are approaching $7 billion.
- Bitcoin ETFs experienced $272 million in outflows on Tuesday.
Nic Puckrin, cofounder of Coin Bureau, pointed out that Bitcoin had already broken its bull trend indicators, including the 50-week and 100-week moving averages. He notes a crucial price point to monitor, which lies around $70,000, just beyond the previous cycle’s all-time high of $69,000.
Puckrin warned that if Bitcoin falls below this psychological barrier, it may trend toward deeper losses, potentially reaching between $55,700 and $58,200. This range aligns with the average realized price across all coins and the 200-week moving average.
Market Sentiment and Influencing Factors
Analysts from Citi attribute the current market turmoil to various circumstances, including Kevin Warsh’s nomination as Fed Chair, who is known for favoring a smaller balance sheet. Additionally, the risk of a crypto winter is also instilling concern among investors.
However, some analysts believe the decline in Bitcoin’s value reflects a broader risk-off sentiment across markets rather than a fundamental decrease in demand. Nic Roberts-Huntley, cofounder of Blueprint Finance, stated that while Bitcoin has struggled to maintain critical technical levels, the situation could stabilize if liquidity improves and key supports hold.
Looking ahead, traders should focus on whether Bitcoin can defend its position in the mid-$70,000s and possibly reclaim the range of $78,000 to $80,000. These will be important levels to track as the cryptocurrency navigates through this turbulent period.
