28.10.202112:12 Forex Analysis & Reviews: Speculators push Bitcoin below $60,000

Bitcoin traded below $ 60,000 on Wednesday as the euphoria over the first US crypto ETF dissipated and traders began taking profits after hitting record prices.

It fell 6.4% to $ 58,132, the lowest price in nearly two weeks. It peaked at $ 66,976 last October 20.

Ether also posted a 6% decline on Thursday.

"I'm not surprised Bitcoin hit a wall at $67,000, having passed the April high, given the speed of the move from $30,000 in July," said Antoni Trenchev, managing partner and co-founder of Nexo. "Bitcoin needs to cool off before it embarks on its next leg up," he added.

Smaller altcoins were also hit, with Cardano losing 9% over the past 24 hours. Polkadot was also down roughly 5%.

Matt Maley, chief market strategist for Miller Tabak, said: "They've always been more volatile, so it's not a big surprise. Those cryptos are held in weaker hands. Most people think that a small number of these alt will survive, so they tend to sell them more quickly than Bitcoin or Ethereum."

Many analysts explained that speculators are now cutting positions after the launch of the first Bitcoin ETF in the United States. The total liquidation of long crypto positions on Wednesday topped $ 700 million, the highest since September 20.

According to Jonathan Cheesman of FTX, the market has been leveraged for several weeks, so it is no surprise that the positioning was skewed.

Stephane Ouellette added that some of the excitement around ETFs has disappeared, and the sell-off has been exacerbated by the fact that there is much more leverage available to crypto retail traders around the world than in other asset classes.

"We already saw a wave of quite severe leverage come into the space which was evidenced by futures contangos, perpetual swap and peer-to-peer lending rates all spiking around the launch of the BTC ETF," Ouellette said. "In the last few weeks, for example, we saw monthly and quarterly BTC futures contangos in the 20-to-30% range. While leverage can in some cases get even more extreme, the activity over the last few days has some tell-tale signs of a typical crypto check-back."

"Bitcoin fell below that level, to $ 58,000. Let's see if it rebounds. Otherwise, watch out for $ 52,000 or $ 53,000 as possible directions," Ouellette added.

Meanwhile, the ProShares Bitcoin Strategy ETF (ticker:BITO) accumulated over $ 1 billion just days after its launch last week.

Petr Kozyakov, co-founder and CEO of Mercuryo, said: "The price slump is being fueled by sellers, who appear to be acting simultaneously in taking profits on their investment. The price correction is an organic one and was not triggered by a clear-cut fundamental."