The Bitcoin (BTC) market has been considerably disturbed during the last 24 hours following a sequence of troubling information stories. Throughout this era, the crypto market chief has recorded notable downfalls with its worth slipping beneath the $66,000 worth mark. Nonetheless, a crypto analyst with X username Luca has postulated this latest worth decline could be attributed to a different issue past the information occasions.
Bitcoin Crash Due To Overleveraged Market, Not Information Occasion: Analyst
On Friday, the Wall Road Journal reported that Tether was beneath investigation by US authorities over potential illicit use of the USDT stablecoin in cash laundering, drug trafficking, and terrorism amongst different crimes.
Such a dangerous report on USDT which ranks as the biggest stablecoin appeared to induce a bearish sentiment within the crypto market which brought on BTC to fall to round $66,000 previous to a refuting assertion by Tether’s administration. Whereas in partial restoration, stories of an Israeli assault on Iran additionally ignited one other downtrend forcing Bitcoin to achieve an area backside of $65,700. Total, BTC’s dropped by 4% from round $68,602 on Friday.
Nonetheless, in an X post on Saturday, Luca states that the worth decline was attributable to a excessive Open Curiosity fairly than the supposed information occasions. The crypto analyst explains that amidst Bitcoin’s downtrend, Open Curiosity additionally dropped by 9% indicating the market was extremely overleveraged.
In accordance with Luca, BTC’s latest rally from $59,000 on October tenth to $69,000 on October twenty first was pushed by Perpetual contracts with little to no spot funding. Thus, the rally was at all times momentary with vital liquidations and worth reversal a certainty.
Is BTC Headed To $60,000?
Regarding the excessive Open Curiosity in Bitcoin, Luca additionally states that the Liquidation Heatmap has proven vital liquidations to happen at purported assist zones as these positions are extremely overleveraged.
Following the latest worth drop, the analyst highlights that $65,000, which represents a serious assist stage, is certainly one of these extremely overleveraged zones with a number of lengthy positions. Luca believes the Bitcoin bulls will lose this assist zone if a retest happens and BTC is prone to fall to $60,000 which can now maintain as an efficient assist stage.
On the time of writing, Bitcoin continues to commerce at $67,001 with a 0.50% acquire within the final day. In the meantime, the asset’s day by day buying and selling quantity is down by 28.23% and valued at $26.93 billion. With a market cap of $1.32 trillion, Bitcoin stays the biggest digital asset on the planet.
Featured picture from Kinesis Cash, chart from Tradingview