Bitcoin Drops to $65K, Triggers $1.8B Liquidations

Bitcoin dropped 8% to a nine-week low of $65,360 from Tuesday’s high of $71,300, triggering more than $1.8 billion in crypto liquidations. Traders are bracing for a test of $60,000 as support to avoid a deeper correction.

Bitcoin hits nine-week low in market-wide correction. Data from TradingView showed new BTC price lows of $65,362 on Bitstamp, the lowest since March 29 as sellers stayed in control. This extended the deviation from the local high of $82,800 to 21%.

The drop occurred amid increasing geopolitical risks surrounding the US-Iran war and came alongside a market-wide correction that liquidated $774 million in longs.

Liquidations total $1.83 billion with Bitcoin hardest hit. More than $1.58 billion in long positions were liquidated, with Bitcoin accounting for $774.2 million of that total and Ether following with $440 million. Across the board a total of $1.83 billion was wiped out of the market in short and long positions.

This marks the largest liquidation since Feb. 6 when BTC price tanked to its multi-year low below $60,000.

Analysts compare event to prior market shocks. Analysts at CryptoBanter said in an X post on Wednesday this marks one of the larger single-day events in recent months. Pseudonymous analyst Byzantine General said it was the highest BTC long liquidations event since the October 10 black swan event.

Analyst DonaX₿τ pointed out that the $1.5 billion in long liquidations recorded were lower than the $1.6 billion posted during the Covid crash in 2020, adding that the industry is growing.

Bitcoin supply on Binance reaches three-month high. Bitcoin supply on Binance has reached a three-month high of 659,000 BTC. CryptoQuant analyst Arab Chain said this signifies a potential for heightened selling pressure in the market especially if it coincides with declining prices or increased volatility.

Rising supply on exchanges can amplify price volatility and selling pressure especially if inflows continue. Bitcoin is now in a fresh distribution phase fueled by increased inflows to exchanges amid extreme fear.

Traders target $60,000 as critical support level. Michael van de Poppe said Bitcoin is in an interesting zone below $66,000 with bulls looking at the area at $61K with the 200-Week MA for support. He added those are important zones of interest for support and he will accumulate more positions within this region.

Colin Talks Crypto said the $65,000-$66,000 range is a reasonable support level for a short-term bounce with the possibility of later retesting the $60,000 support zone. Re-testing $60k is still highly likely and breaking below it later this year is definitely not ruled out. Bulls are expected to defend the $60,000 level aggressively.