On Friday, Bitcoin (BTC) experienced a downturn, dropping to $65,600 after recently achieving record highs.
Market analysts stayed composed, interpreting the decline as a standard corrective action within an ongoing upward trend.
On-Chain College, a well-regarded analyst with a substantial following of over 52,000 on X, remarked that a 10% pullback in Bitcoin’s value is typical during bullish phases, in contrast to potential corrections exceeding 30%.
Following the significant surge to new highs, the majority of Bitcoin holdings are in unrealized gains, leading On-Chain College to categorize the recent dip as „standard behavior in a bull market.“
„The recent drop follows a significant rally to new highs, with over 95% of holdings in unrealized gains,“ the analyst stated. „This is a common occurrence in a bull market, nothing unusual here.“
What’s the Potential Downside for BTC?
Amid the current market adjustment, there’s speculation about the extent of the potential downturn.
Credible Crypto, a seasoned trader, identified a support zone around $64,000 due to a notable reduction in open interest (OI) during the decline.
„This zone could be a logical point for a bounce or turnaround, especially with the elimination of accumulated OI,“ the trader mentioned.
Comparing the present correction with historical trends, trader Jelle noted that the average significant Bitcoin correction in this cycle has been around 20%.
He posited that a similar-sized correction could bring the price down to approximately $58,000.
While Jelle was surprised by the pullback, he remains optimistic about future price increases. Nonetheless, he urged investors to be cautious and ready for possible further drops.
Impact of the Bitcoin Dip: Over $800 Million in Liquidations
The unwinding of leveraged long positions led to a substantial increase in liquidations.
Data from CoinGlass shows that long and short traders faced losses exceeding $810 million across major centralized exchanges in the last 24 hours.
In detail, 246,416 traders were liquidated, with long position liquidations totaling $667 million and short position liquidations at about $143 million.
Binance had the majority of these liquidations at approximately $300 million, followed by OKX with $293 million and Bybit with about $94 million.
Futures tied to Bitcoin saw $280 million in both short and long liquidations over the past day, while futures linked to Ethereum witnessed over $138 million in liquidations.
Meanwhile, popular trader Skew revealed that few market participants are willing to take short positions. Spot selling was leading the price lower, and more long positions were being liquidated.
Skew noted that panic shorting was not yet evident, with most activity involving profit-taking hedges, which often lead to price bounces.
