Bitcoin’s Rebound Could Trigger $1 Billion Short Position Liquidation Amid Market Uncertainty

Bitcoin's Recent Dip and Its Market Impact

On June 6, Bitcoin experienced a sharp decline from its peak of $71,000, dipping to $68,507 before recovering slightly above $69,000. This decline occurred amidst macroeconomic uncertainty following the release of the United States Employment Situation Summary Report, which indicated higher-than-expected job growth in May.

In addition to Bitcoin's drop, Ether also declined by 3.58% over 24 hours, while altcoins like Solana, Dogecoin, and Pepe suffered significant declines of 5.61%, 8.70%, and 9.99%, respectively. This market plunge resulted in a $409.51 million liquidation of both short and long positions, with $56.71 million being long positions in Bitcoin.

However, just two days prior to this decline, Bitcoin was trading between $70,000 and $71,662, prompting optimism among traders that it might approach its all-time high of $73,679.

Traders are currently betting that Bitcoin's price may not rebound quickly. If Bitcoin returns to $71,000, $1.38 billion in long positions will be liquidated, indicating that futures traders anticipate further price declines.

This comes amid investor questions about why Bitcoin's price has not exceeded its March all-time highs, despite a 19-day streak of positive inflows into Bitcoin exchange-traded funds (ETFs).

Analysts have emphasized that multiple factors influence Bitcoin's price, and that ETFs alone do not drive its movement. Capriole Investments founder Charles Edwards noted, "ETF flows are fantastic, but they are not strong enough to exceed the entire ecosystem selling (yet)." Crypto trader Christopher Inks also stated, "The market is made up of spot, futures, ETFs, and options."