Massive Crypto Liquidations Forecasted as Bitcoin Plummets to $60K: Expert Trader Predicts
The cryptocurrency market saw a 7% decline in overall market capitalization, with top tokens like bitcoin, ether, and others experiencing sharp falls in the past 24 hours.
The drop in prices was triggered by higher-than-expected inflation data and profit-taking by some traders. Analysts are predicting further losses before a potential rebound.
Crypto market capitalization dropped by 7%, marking the biggest fall so far this year. Bitcoin (BTC) saw an 8% plunge in the past 24 hours, wiping out all gains from the previous week and leading to a marketwide decline.
On Thursday, bitcoin fell from its high of $73,000 to as low as $65,800 before slightly recovering. Meanwhile, the Coindesk 20 index, which tracks the most liquid cryptocurrencies, was down by 8.25%.
Ether (ETH), Cardano’s ADA, BNB Chain’s BNB, and XRP all experienced similar losses, while meme coins like dogecoin (DOGE) and shiba inu (SHIB) fell by 13%. The only major token to see some gains was Solana’s SOL, which saw a 1% increase since Thursday.
The sell-off began during U.S. trading hours on Thursday, following the release of the February Producer Price Index (PPI) which showed a 0.6% increase, doubling the pace from January and exceeding economist forecasts. This dampened hopes for a potential rate cut in May.
Data also revealed that crypto futures suffered losses of over $800 million, making it the second-largest drop of the year. Long positions, or bets on higher prices, saw $660 million in liquidations, which likely contributed to the sharp decline. Liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin.
Some traders are warning of further losses in the coming weeks before a potential rebound in prices.
“New historical highs often trigger selling,” notes Alex Kuptsikevich, senior market analyst at FxPro, in an email to CoinDesk. “Some players are taking profits, which raises the question of whether there will be enough demand at current levels or whether most will wait for a deeper correction.”
Kuptsikevich also adds, “In a corrective scenario, the $65,000-65,500 and $60,000-60,500 ranges are worth watching, as they contain important round numbers (significant for retail traders) and the 76.4% and 61.8% Fibonacci retracement levels.”
Fibonacci retracements are a technical tool used to predict potential support and resistance levels for prices.
