Originally published on: August 13, 2024
Bitcoin is currently positioned at a “perfect” macroeconomic setup, paving the way for a bullish breakout. However, over $500 million in looming liquidations could introduce more volatility to the market for the world’s premier cryptocurrency.
Real Vision’s chief crypto analyst, Jamie Coutts, noted that Bitcoin’s current mid-cycle correction, at around $63,197, relative to the global M2 money supply, sets the stage for an imminent bullish surge. The increasing global liquidity from the M2 money supply, along with the advent of spot Bitcoin exchange-traded funds (ETFs), creates this optimal environment for Bitcoin, according to Coutts.
Following a $510 billion crypto market sell-off last week that plummeted Bitcoin’s price to a five-month low of $49,500 on August 5, the cryptocurrency is still struggling to surpass the key psychological threshold of $60,000.
Although the macroeconomic perspective remains bullish, Bitcoin’s price might experience a dip to $55,000. A potential drop below $58,000 would trigger liquidations amounting to $489 million in cumulative leveraged short positions across all exchanges, as per Coinglass data. If Bitcoin falls below $57,500, cumulative short liquidations could exceed $800 million.
Currently caught in a two-week downtrend since July 28, Bitcoin is facing challenges in breaking out. Analysts like Rekt Capital emphasize the importance of a successful retest of the downside trend line to unleash more bullish momentum.
Despite the anticipation of a correction to $55,000, many analysts foresee further upward potential for Bitcoin. Subscribe to the Markets Outlook newsletter for more insights on investment opportunities, risk mitigation strategies, and refining trading tactics.
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