Bitcoin (BTC) tumbled below $50,000 during the early Asian trading hours on Aug. 5 as risk-off sentiment gripped global markets. Bitcoin is down nearly 31% over the last three days in a “once in a 7-10 yr event” that has left analysts with mixed opinions on whether BTC will recover in the short term.
BTC/USD daily chart. Source: TradingView
Bitcoin’s drop below $50,000 has seen more than $500 billion wiped out of the crypto market in just 24 hours, accompanied by the liquidation of many leverage positions.
According to data from Coinglass, approximately $1.08 billion worth of leverage positions have been liquidated across derivatives markets, with long liquidations accounting for 74% of these, at $803.76 million.
Over the same period, more than $404.63 million worth of Bitcoin positions were liquidated, of which $282.81 million were long liquidations.
Total crypto liquidations. Source: Coinglass
The market has mixed opinions about a Bitcoin price recovery
The current correction in Bitcoin price comes against a backdrop of numerous factors, including weak US economic and jobs data on Aug. 2 that ignited recession fears and rising tensions in the Middle East.
‘Have we been hit by the perfect storm?” QCP analysts said in an Aug. 5 post on X.
Independent trader Bob Loukas referred to this as a “once in a 7-10 yr event,” which makes it difficult to tell which move the market will take immediately after such a drawdown.
Loukas is of the opinion that that correction may go on until mid-September, with a good rally at some point. “Will just look like a deeper cycle pullback by the end of it,” he added.
Fellow analyst McKenna warned Bitcoin investors not to expect a sharp recovery in the short term, adding that the market could move “sideways for 1-2 months.”
“This isn’t a v-bottom scenario. I believe the value will remain cheap for some time and enter an accumulation market phase.”
Michael van de Poppe, the founder of MN Capital, took a more neutral stance, saying the ongoing correction in BTC’s price could either define the cycle’s bottom or initiate the start of a “big crisis.”
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