Bitcoin, Dead Again?...Fell Below $75,000 and a $500 Million Liquidation Bomb

▲ Bitcoin (BTC), cryptocurrency decline/AI generated image

Bitcoin (BTC) falling below $75,000 has caused investor sentiment across the cryptocurrency market to freeze rapidly. Strong selling pressure, leverage liquidations, outflows from Ethereum spot ETFs and Bitcoin spot ETFs, and geopolitical uncertainties all converged simultaneously, leading to a widespread weakening of major cryptocurrencies.

CoinGape reported that Bitcoin closed around $74,600 after falling approximately 3% in the last 24 hours. The overall cryptocurrency market also dropped by over 3%, reducing its market capitalization to about $2.5 trillion. Ethereum (ETH) fell by more than 4%, struggling to recover its key price level of $2,000, while XRP, Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) also showed bearish trends amidst the broader market correction.

The first cause of this sharp decline was identified as massive leverage liquidations. Following Bitcoin's plunge, aggressive long position liquidations occurred on major cryptocurrency exchanges, with over $500 million in leveraged positions wiped out within hours. During its descent, Bitcoin's market capitalization shrank by approximately $55 billion, and it plummeted by nearly $1,000 in just 10 minutes.

Geopolitical tensions also fueled risk-off sentiment. According to the article, as tensions between Iran and the United States escalate, Iran is reported to have submitted a two-phase proposal to the U.S., including sanctions relief and changes related to navigation in the Strait of Hormuz. Uncertainty surrounding the Strait of Hormuz, a strategic energy transport route, simultaneously pressured investor sentiment in both traditional financial markets and the cryptocurrency market.

Outflows from Bitcoin spot ETFs were also cited as a contributing factor to the decline. According to SoSoValue data, U.S. Bitcoin spot ETFs recorded a net outflow of approximately $105 million in trading on May 22nd, continuing their fund exodus for six consecutive trading days. Over these six trading days, the total net outflow from Bitcoin spot ETFs amounted to approximately $1.26 billion. Ethereum spot ETFs also recorded a net outflow of $6.67 million on the same day, marking ten consecutive days of fund withdrawals.

Technical trends also failed to confirm a recovery in buying momentum. According to the article, Bitcoin partially recovered to $75,368 after selling pressure, but the Relative Strength Index (RSI) was near the oversold zone, and the Chaikin Money Flow indicator remained neutral. Analysis suggested that if the bearish trend continues, Bitcoin could test the $74,000 support level, and if it falls below that price, it could further decline to the $72,500 support level. Conversely, for short-term buying pressure to regain dominance, Bitcoin needs to re-cross the $76,000 resistance level, and if successful, the next resistance area is projected at $77,000.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*