Bitcoin (BTC) Price May Not Have Fully Recovered From the Recent Loss of Momentum

Bitcoin (BTC) price has yet to recover from the loss of momentum seen over the last few days. However, the cryptocurrency market seems to be under threat of further declines.

Bitcoin (BTC) price continues to experience turbulence, and the broader cryptocurrency market seems to be in danger of further declines. However, the interesting part is that the reason behind this decline might not be the bearish tendency of investors, but rather the bullish tendency.

Bitcoin price saw an unexpected decline

Bitcoin price dropped from $62,000 to $53,300, shocking the cryptocurrency market and dashing many bullish dreams. A total of $263 million worth of long positions were liquidated in the futures market in three days. This is the second highest liquidation in the last two weeks, with the previous high being recorded three months ago in April. Usually, such high liquidations force investors to calm down and pull back to allow the market to cool. However, Bitcoin holders seem to be having different plans.

The decline is said to be influenced by the pessimistic speech made by Federal Reserve Chairman Jerome Powell earlier this week.

„The market has too much paper in the system.

Despite heavy long liquidations, we are seeing more longs coming in to replace them, preventing a proper reset.

Chart: Open Value Oscillator…

OV is a measure of how many bets are in the system, denominated in BTC. pic.twitter.com/wxStH2alGy

Investors are expecting a rapid recovery and stand to benefit from it. This point was highlighted by analyst Willy Woo when explaining the difference between buying futures and buying spot. He stated that futures trades might be creating a bear market environment and that this could lead to further losses. According to the Bitcoin Open Value Oscillator, there are still around half a million long positions open in the futures market. If the price of Bitcoin drops further, these long positions are likely to get liquidated. This could lead to an extended bear period for BTC.

What to expect at the price now?

Bitcoin price, which was trading at $56,961 at the time of writing, is stabilizing after dropping to nearly $53,300 yesterday. The cryptocurrency is yet to realize the expected 17% decline resulting from the double top formation that formed four months ago. This prediction targets a drop to $50,900, which would lead to the mass long position liquidations mentioned above. If Bitcoin loses the $55,000 support, this possibility will become even stronger.

On the other hand, if Bitcoin price manages to make an upward bounce from $55,000 and turns $58,800 back into the support level, the recovery might begin. This would allow it to rise to $60,000 to invalidate the bear thesis. As a result, the BTC market is at a critical stage. Investors’ anticipation of a rapid recovery could disrupt the market and trigger the expected decline. It is crucial to keep an eye on whether Bitcoin manages to maintain the $55,000 support in the coming days and if the price movements confirm the above-mentioned predictions.

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