Panic selling sends Bitcoin below $60K once again – The pressure piles on!

In the past 24 hours, Bitcoin [$BTC] saw $415.83 million worth of derivatives traders liquidated, with $319.18 million worth of these positions being long. Recent hours of trading saw the leading crypto test the $59.1k low once again, threatening another bearish breakdown.

Since the 6th of May, the Coinbase Premium Index for Bitcoin has been negative. The metric tracks the asset’s price difference between Coinbase (USD pair) and Binance ($USDT pair).

The low premium levels implied reduced enthusiasm among U.S.-based investors compared to the global market. Additionally, the liquidation heatmap data AMBCrypto reported on earlier indicated why $BTC prices might dive toward the $57k area in the coming days.

Price weakness versus subsiding Spot selling pressure

The 4-hour chart showed a bearish swing structure in place. The fall from $74.5k to $59.1k was used to plot a set of Fibonacci retracement levels (yellow). The 50% level at $66.8k rejected the bullish advance.

The longer-term structure, combined with this rejection, meant that a price drop to $55.5k and possibly even $49.6k could commence in the coming weeks.

The hidden danger for the next Bitcoin market phase

Glassnode’s weekly market report noted that Spot markets led the sell-off. Derivatives markets reacted to the move rather than driving it, which can help achieve market lows in the coming months.

Some long-term investors were beginning to see current prices as attractive buying levels. However, a market-wide accumulation was not yet underway, according to the analytics platform.

There is a threat that could catalyze the market bottom.

Crypto analyst Axel Adler Jr. drew attention to the Bitcoin and the Strategy [MSTR] stock’s drawdown. They were 51% and 78% down from their highs, respectively, which represented heavy losses.

Still, it wasn’t close to the 2022 bottom values, when drawdown reached -77% and -89%, respectively.

If the company is forced into a position where it has to sell spot Bitcoin to pay preferred dividends and the company’s interest on debt, it could be bad news for the wider crypto market.

Though the company’s debt has no margin call risk, its spot selling could send the already fearful market sentiment into a widespread panic.

Such an outcome could hasten or even mark the final capitulation of the cycle before an eventual recovery.

Final Summary

• The Bitcoin Coinbase Premium Index has been negative for more than six weeks, signaling weak interest from U.S. investors.
• In the short term, another price drop below $59k appeared likely, as derivatives markets catch up to the spot-driven move.