Bitcoin’s $300M Liquidation Carnage—Is This the Dip or the Cliff?
Bitcoin just flashed red—hard. A sudden slip triggered a staggering $300 million liquidation bloodbath across leveraged positions. Traders got caught with their hands in the cookie jar (again).
So what’s next? The market’s either licking its wounds or prepping for a fire sale. Volatility? As predictable as a Wall Street analyst’s bonus.
Key levels to watch: If BTC holds above $40K, bulls might salvage this mess. Break below? Cue the panic-selling chorus. Remember: In crypto, ‘correction’ is just a fancy word for ‘someone’s getting rekt.’
One thing’s certain—the casino stays open 24/7. Place your bets.
What’s Next?
Dawson expects a “slow down” in inflow for the top two cryptocurrencies after the recent drop. But explained that Fed Chairman Jerome Powell’s speech on Friday is “critical in determining how the bull market progress for the next three months.”
The appointment of President Trump's nominee, Stephen Miran, to the Federal Reserve’s governing board to fill a temporary vacancy after Adriana Kugler's departure has become a focal point for analysts.
"In light of the recent board changes, J.P. Morgan Global Research now looks for the next Fed rate cut to occur in September," the firm stated in its August 15 report.
This outlook is now in line with the broader market's tempered expectations, with CME’s FedWatch tool showing an 83.4% probability of a 25 basis-point rate cut in September.
A rate cut makes holding cash less attractive, prompting investors to seek higher returns in riskier assets like stocks and cryptocurrencies. This increased demand for risk assets pushes their prices up.
Corroborating this bullish outlook is the spot bid and ask delta at 10% depth, which shows a bid-skewed orderbook, hinting that investors are buying the dips.
Last time this metric flashed a dip-buying activity on August 2, Bitcoin surged nearly 12% in the next 11 days and hit a record high of $124,545.
Due to the combination of supportive macro signals and renewed investor appetite, the overall market outlook remains bullish.
Powell’s stance on interest rates, coupled with the Russia-Ukraine peace deal, could restart the bull run.
If Powell stands firm on keeping interest rates higher for longer, it could, however, trigger another selling spree, which could lead to a massive liquidation event.
