The world’s largest cryptocurrency Bitcoin (BTC) and the broader cryptocurrency market have come under strong selling pressure with the BTC price losing its support at $71,000 and falling all the way to $68,500. As of press time, the Bitcoin (BTC) price is trading at $69,404.43 with a market cap of $1.37 trillion.
Bitcoin Hedge Funds Net Shorts At Record High
Analyst Zerohedge has reported a substantial increase in Bitcoin hedge fund net shorts, reaching a new record high.
Zerohedge remarked, “Big jump and a new record high in Bitcoin hedge fund net shorts. When this snaps, it will make Volkswagen/GME look like amateur hour.”
Big jump and new record high in Bitcoin hedge fund net shorts.
When this snaps, it will make Volkswagen/GME look like amateur hour https://t.co/86QzbvPIFE pic.twitter.com/b9ZAq1eJSf
— zerohedge (@zerohedge) June 7, 2024
This surge in net shorts suggests a highly bearish sentiment among hedge funds, indicating a potential for significant market volatility if these positions are forced to unwind. The situation draws parallels to historic short squeezes, such as those seen with Volkswagen and GameStop (GME), implying that a similar dramatic shift could occur in the Bitcoin market.
Bitcoin and the rest of the crypto market came crashing down as the meme stock rally ends. On Friday, the GameStop (NYSE: GME) share price fell by a massive 41% as soon as Roaring Kitty went live.
Will the BTC Price Correct Further?
Crypto analyst Ali Martinez has identified a key support level for Bitcoin, emphasizing its importance for the cryptocurrency’s future trajectory.
Martinez stated, “The most crucial support level for Bitcoin is now at $68,500! If BTC maintains this level, it’s up only from here”. According to Martinez, maintaining the $68,500 support level is vital for Bitcoin’s continued upward movement.
Prolonged bullish trends typically lead to substantial downward corrections. Historical data indicates that after an extended bullish phase, a rapid and sharp bearish wave often follows. Analyst Alan Santana predicts that this bearish wave could occur at a speed 2 to 2.5 times faster than the preceding bullish rally.
He explained: “When the upward potential of the market is perceived to be exhausted, investors are more likely to exit quickly. Unlike the gradual accumulation during a bullish phase, the sell-off during a correction happens rapidly, leading to a steep decline.”
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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