Crypto bulls bleed as Bitcoin drops to $57k, What’s next?

The global digital assets market printed red indexes all around as the biggest crypto slips to the $57,000 price zone. Bitcoin has now seen a drop of over 10% in the last 7 days moving the fear and greed index near to Fear sentiments with 43 points.

The cumulative crypto market cap dropped by around 2% in the last 24 hours to stand at $2.02 trillion. Its 24 hour trading volume jumped by 69% to stand at $56 billion suggesting that traders are looking to adjust their funds amid the recent dump.

$136M of longs liquidated

As per the data provided by Coinglass, More than 57K traders were liquidated in the last 24 hours as the total liquidations breached the $162 million mark. The single largest liquidation order happened to be on the crypto exchange Binance of $10 million.

Over $136 million worth of liquidated bets (83%) turned out to be long positions set by the traders on top cryptos price action. This suggests that bulls were hoping Bitcoin and other cryptos would recover and maintain the slightly positive momentum, however, BTC failed to keep up with the $58k price level.

Bitcoin’s 2% fall in the last 24 hours has added to its decline of over 7% in the last 30 days. BTC is trading at an average price of $57,400, at the press time. Its 24 hour trading volume spiked by 100% to stand at $27.1 billion.

Investors losing interest in Bitcoin for now

Bitcoin is lagging behind traditional assets as August wrapped up as it struggled with low liquidity and fears of potential sell-offs by governments. The US, China, UK, and Ukraine might offload their Bitcoin holdings which can contribute to a possible $33 billion supply overhang. 

According to Kaiko, the US holds 203,220 BTC, China 190,000, the UK 61,200, and Ukraine 46,350. The defunct crypto exchange Mt. Gox exchange still has about 46,170 BTC left to distribute.

Our latest Deep Dive just dropped.

This week we looked at liquidity and what to watch as Mt. Gox redistributions continue and governments sell their $BTC holdingshttps://t.co/CofIm7p4ub

— Kaiko (@KaikoData) August 29, 2024

Data shared by Ali Martinez depicts that the exchange volume momentum dropped in exchange related to on-chain activity. This points out the lower investor interest in Bitcoin and reduced network usage. It added that the capital flows for BTC and other top cryptos fell below for Stablecoins which signals a cautious market ahead.

This indicates that investors are shifting to stablecoin for safety and maybe for future buying opportunities. It often reflects the uncertainty or defensive stance of traders in the market.