Bitcoin Drops 8% to Nine-Week Low Amid Geopolitical Risks

Bitcoin (BTC) has dropped 8% to a nine-week low of $65,360 from Tuesday’s high of $71,300 amid increasing geopolitical risks surrounding the US-Iran war.

Key takeaways:

Bitcoin slipped to $65,000 on Wednesday in a market-wide correction, liquidating $774 million in longs.

Traders say Bitcoin needs to hold $60,000 as support to avoid a deeper correction in BTC price.

Bitcoin wipes out longs in tumble to $65,000

Data from TradingView showed new BTC price lows of $65,362 on Bitstamp, the lowest since March 29 as sellers stayed in control.

BTC/USD daily chart. Source: Cointelegraph/TradingView

This extended the deviation from the local high of $82,800 to 21% and was accompanied by massive liquidations across the derivatives market.

Related: Bitcoin’s $224K ‘fair value’ may emerge if sovereign debt fears deepen: Bitwise

More than $1.58 billion in long positions were liquidated, with Bitcoin accounting for $774.2 million of that total. Ether (ETH) followed with $440 million in long liquidations.

Across the board, a total of $1.83 billion was wiped out of the market in short and long positions, marking the largest liquidation since Feb. 6, when BTC price tanked to its multi-year low below $60,000.

Total crypto liquidations across all exchanges. Source: CoinGlass

“This marks one of the larger single-day events in recent months,” analysts at CryptoBanter said in an X post on Wednesday.

Pseudonymous analyst Byzantine General shared Velo data, which tracks liquidations from four major crypto exchanges: Binance, Bybit, OKX and Deribit, saying:

“Highest $BTC long liquidations event since the infamous October 10 black swan event.”

Bitcoin aggregate liquidations. Source: X/Byzantine General

Fellow analyst DonaX₿τ pointed out that the $1.5 billion in long liquidations recorded today were lower than the $1.6 billion posted during the Covid crash in 2020, adding:

“This industry is growing.”

Meanwhile, Bitcoin supply on Binance, the world’s largest crypto exchange by trading volume, has reached a three-month high of 659,000 BTC.

This signifies a “potential for heightened selling pressure in the market, especially if it coincides with declining prices or increased volatility,” CryptoQuant analyst Arab Chain said in a QuickTake note on Wednesday, adding:

“Rising supply on exchanges can amplify price volatility and selling pressure, especially if inflows continue in the coming period.”

Bitcoin supply on Binance. Source: Cryptoquant

As Cointelegraph reported, Bitcoin is now in a fresh distribution phase fueled by increased inflows to exchanges amid extreme fear.

$60,000 is now Bitcoin’s last line of defence

BTC swept lows around $65,000, leaving traders questioning where Bitcoin is likely to find support.

Bitcoin is in an “interesting zone” below $66,000 with bulls looking at the “area at $61K with the 200-Week MA for support,” MN Capital founder Michael van de Poppe said in a Wednesday post on X, adding:

“Those are important to be looking at crucial zones of interest for support and I'm sure that I'll be going to accumulate more positions within this region.”

BTC/USD weekly chart. Source: Michael van de Poppe

Analyst Colin Talks Crypto said the $65,000-$66,000 is “a reasonable support level for a short-term bounce,” with the possibility of the BTC/USD pair later retesting the $60,000 support zone.

“Re-testing $60k is still highly likely. And breaking below it later this year is definitely not ruled out.”

BTC/USD six-hour chart. Source: X/𝙲𝚘𝚕𝚒𝚗 𝚃𝚊𝚕𝚔𝚜 𝙲𝚛𝚢𝚙𝚝𝚘