Bitcoin Price Slips Below $60K, Over $8M Long Positions Liquidated

Bitcoin has seen a drop below $60,000 for the first time since late June, causing significant losses for long contracts. Coinglass reported that $8.4 million worth of long contracts were liquidated in just one hour. Ethereum derivatives traders also suffered losses, with approximately $8.8 million worth of long ETH contracts liquidated during the same period.

Long contracts involve betting on the price increase of assets like Bitcoin and Ethereum, while short contracts speculate on price decreases. When the margin between a contract’s target price and the spot price widens too much, traders may face liquidation.

The sudden decline in prices follows a day where Bitcoin spot ETFs in the U.S. experienced net outflows after five consecutive days of inflows. Currently, Bitcoin has rebounded above $60,000, trading at $60,215.46, a 3.8% decrease from the previous day. Ethereum, on the other hand, is trading at $3,308.61, down 4% over the past 24 hours.

Market concerns have been heightened by potential repayments to creditors by the Mt. Gox trustee, who oversees the bankrupt exchange’s proceedings. Additionally, inflation and U.S. federal interest rates have exerted significant influence on crypto markets.

Federal Reserve Chair Jerome Powell indicated that the FOMC is not in a rush to lower interest rates, emphasizing the strength of the U.S. economy and labor market. Powell’s remarks were made during the ECB’s Forum on Central Banking, where he highlighted the importance of making informed decisions to maintain progress in controlling inflation.

Powell’s caution regarding rate cuts reflects the Fed’s commitment to sustaining economic stability. Investors have been adopting a risk-off strategy, favoring safer investments like treasury bonds amid uncertainty about future rate adjustments.