From Investing.com: 2024-07-05 09:00:25

In the cryptocurrency market, a massive liquidation event has wiped out almost $700 million of long orders as Bitcoin dropped below $55,000. Recovery is expected to be slower this time around due to the scale of the losses.

Large liquidations are causing a cascade effect in the market, leading to further price drops and triggering panic among investors.

Factors contributing to the downturn include panic sales, direct selling pressure from the transfer of funds from Mt. Gox exchange, and substantial selling pressure from ETFs.

The market is also impacted by governments like the U.S. and Germany liquidating their cryptocurrency holdings, increasing the supply and driving prices lower.

The current market is experiencing an overwhelming selling volume beyond its liquidity capacity, making even small sales significantly impact prices.

Given the large liquidations, institutional sell-offs, government liquidation, and overall negative sentiment, experts predict a challenging recovery process ahead, suggesting preparation for a midterm bearish market.

Read more at Investing.com: Enormous $670 Million Destroyed on Market in 24 Hours as Bitcoin (BTC) Lost $55,000 By U.Today