Brutal Bitcoin Liquidation Cascade Imminent Below $59K, Warns Analyst

A crypto analyst known as ‘Reflection’ has issued a stark warning about a potential Bitcoin liquidation cascade below the $59,000 level. According to data from CoinGlass, over $1.6 billion in long leverage is concentrated around $58,000, a zone the analyst described as unprecedented in their trading career. “In all my years trading, I’ve never seen this much long-side liquidity stacked in one single zone,” they said on Wednesday.

Bitcoin fell to $59,175 on Wednesday, matching its early June low Sector. The analyst warned that this concentration of long positions could trigger a significant liquidation event if the price drops further. They compared it to a “classic liquidity hunt” that historically forms macro bottoms. “When that liquidity gets taken, there’s nothing left to dump. That’s how every macro bottom has formed.”

Over the past 24 hours, approximately 178,000 traders were liquidated, with total liquidations reaching $984 million, according to CoinGlass. More than 80% of these were long positions, reflecting the market’s vulnerability to a downward move.

A separate analyst from CryptoQuant, known as ‘Darkfost’, observed that in every bear market, annual realized profits eventually fall below realized losses. Currently, annual average realized profits stand at $305 billion versus $198 billion in losses, suggesting further losses may be imminent. “The market suggests that capitulation could extend further, to the point where annual realized losses become dominant,” they noted.

Bitcoin’s recent price action saw it hit a near two-year low just above $59,000 before recovering slightly to $61,000 in Asian trading on Thursday. The $60,000 level is seen as key long-term resistance, while the next major support lies around $54,000. Previous bear market bottoms have also dipped below the realized price, which currently sits at a little over $53,000.

The warnings highlight the risk of a sharp sell-off that could wipe out leveraged long positions, potentially marking a macro bottom for the cryptocurrency.

Source: https://cryptopotato.com/brutal-bitcoin-liquidation-cascade-imminent-below-59k-warns-analyst/