Bitcoin’s Bullish Potential Clouded by $500M in Looming Liquidations

Bitcoin's current macroeconomic environment seems "ideal" for a breakout, yet the cryptocurrency faces potential instability due to over $500 million in upcoming liquidations.

According to Jamie Coutts, a leading analyst at Real Vision, Bitcoin’s mid-cycle correction aligns with historical patterns related to the global M2 money supply. Coutts highlighted that Bitcoin often bottoms out before the global liquidity bottom, then surges ahead of liquidity movements, leading to a mid-cycle correction.

Over the past decade, #Bitcoin has had a tendency to trough several months before the bottom in global M2. Then it rips, gets way ahead of the move in liquidity, and has a mid-cycle correction.

Now, momentum in global liquidity is starting to accelerate higher while all the… pic.twitter.com/0A9hV9m25h

— Jamie Coutts CMT (@Jamie1Coutts) August 13, 2024

Coutts’ assessment comes as Bitcoin rebounds from a recent $510 billion market sell-off that dropped its price to a five-month low of $49,500 on August 5. Despite the recovery, Bitcoin remains below the significant $60,000 threshold.

However, Bitcoin’s price could face a dip to around $55,000. Coinglass data suggests that a decline below $58,000 could trigger the liquidation of $489 million in leveraged short positions. If Bitcoin drops below $57,500, liquidations could exceed $800 million.

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Bitcoin at a Crossroads: Crash Ahead or Major Surge?

Bitcoin is also struggling with a two-week downtrend, which began on July 28. Analyst Rekt Capital noted that overcoming this downtrend and achieving strong buying volume could be crucial for Bitcoin to regain upward momentum. Some analysts predict a potential drop to $55,000 before Bitcoin can potentially rise further.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.