On June 2, Bitcoin, the leading cryptocurrency, fell below the $70,000 threshold, hitting its lowest level in nearly two months. According to Cointelegraph, the entire crypto market simultaneously experienced an $800 million liquidation wave, underscoring heightened market volatility. This liquidation event, one of the larger ones recently, indicates that long-held leveraged long positions are being rapidly wiped out.
From a technical perspective, analysts are closely monitoring the 200-day moving average trendline. The 200-day moving average reflects the average price over the past 200 trading days and is widely used as a benchmark for gauging long-term market trends, often regarded as the dividing line between bull and bear markets. Prices persistently trading below this line are typically viewed as a sign of a weak market. The 200-day MA as a traditional bull/bear boundary has notable psychological impact on the market. Currently, Bitcoin's price is hovering around this average, with intense tug-of-war between bulls and bears, and traders are keeping a close watch on whether this key level holds to determine the next market direction.
The massive liquidations were primarily from long positions. In derivatives trading, when the price drops to a predetermined liquidation level, exchanges automatically close positions, triggering a cascade of sell orders. The $800 million in liquidations shows that a large amount of highly leveraged capital was forcefully liquidated during the rapid decline, and such large-scale liquidations in turn further depress prices, creating a negative feedback loop that exacerbates Bitcoin's downward pressure. Market observers note that this sell-off accompanied by heavy liquidations indicates that the excessive long leverage is being corrected. Bitcoin has been trending lower from recent highs, with the overall market under pressure.
At the time of writing, Bitcoin continued to oscillate below $70,000, with bulls and bears locked in a struggle around the 200-day moving average.