Leading cryptocurrencies experienced a significant decline on Thursday, diverging from the strong rally seen in the stock market. Bitcoin, which had surged close to $60,000 earlier in the day on positive macroeconomic news, abruptly reversed course, falling below $57,000—its lowest point in a week. Ethereum followed a similar trajectory, dipping as low as $2,530 after facing resistance at $2,670.
This southward movement resulted in total liquidations of $221 million in the last 24 hours, with over $173 million in upside bets being wiped out. While Bitcoin’s Open Interest (the total value of outstanding contracts) fell less significantly than its price drop, it signaled the entry of new short sellers. This, along with the Cryptocurrency Fear & Greed Index flashing “Fear,” indicated strong selling pressure in the market.
Meanwhile, the stock market closed on a high note on Thursday, fueled by encouraging macroeconomic numbers. Retail sales increased in July, while weekly jobless claims decreased for the week ending August 9th. These positive indicators helped alleviate recession fears that had emerged following a report released on July 2nd.
Prominent cryptocurrency trader Poseidon highlighted the significant increase in Open Interest despite Bitcoin’s sideways movement, indicating aggressive short selling. They expressed a strategy of looking for long entries if the price dips into the demand zone, with an invalidation point below $54,000 and a target of the previous highs above $63,000.
Ali Martinez, another widely followed analyst, had predicted Ethereum’s correction to $2,350 after identifying a rising wedge pattern. With Ethereum dropping below $2,600, the possibility of further retracement remained a concern.
