Bitcoin price is down today as an uptick in liquidations and a wider market correction impact investor sentiment.
Bitcoin’s BTC $67,767 price dropped 3.5% to as low as $66,584 on May 31 as the broader market correction reinforced BTC’s resistance at the $69,000 level. BTC is now trading 9% below its $73,835 all-time high reached on March 14.
BTC drop below $68,000 leads to a marketwide sell-off
Bitcoin price fell below $68,000 at the Wall Street open on May 31, causing a marketwide sell-off that saw the global crypto market capitalization drop 2.2% over the past 24 hours to rest at $2.5 trillion, according to data from CoinMarketCap.
Other top 10 non-stablecoin cryptocurrencies are also flashing red, with Ether ETH $3,785 down 0.8% over the last 24 hours. Solana SOL $166, BNB Chain’s BNB, Cardano ADA $0.45 and Dogecoin DOGE $0.16 have slumped more than 2% over the same time period.
Memecoin’s were also tumbling after recording an impressive performance over the last few days. Just like DOGE, Shiba Inu’s SHIB is down 6.4%. The new memecoins in Solana’s ecosystem, Dogwifhat (WIF) and Book of Meme (BOME), each recorded the largest losses of more than 5%.
Independent crypto trader Bloodgood observed the slump in memecoins, saying that when the frenzy is over, “capital will rotate to quality.”
BTC longs rekt
The broader liquidation of long positions versus the short ones has further fueled Bitcoin’s underperformance today.
Notably, the Bitcoin derivatives market has witnessed approximately $144 million worth of liquidations in the last 24 hours, out of which $105.14 million were long. When long positions are liquidated, it generally involves selling off the asset (voluntarily or by the broker), which can drive the price down further.
Bitcoin’s open interest (OI) has flattened around $33 billion but remains lower compared to its 2024 peak of around $39.3 billion.
Meanwhile, the cryptocurrency’s funding rate is positive at 0.016% per week, showing the interest longs are ready to pay short to keep their positions open. Still, the funding rate has dropped significantly compared to its 2024 peak of over 2% per week.
The substantial drop in the funding rate and a reduced open interest from its peak might suggest a reduction in speculative trading or a decrease in overall market confidence.
It could also reflect a shift in trader expectations about future price movements, possibly anticipating less volatility or fewer strong upward price movements.
BTC price faces stiff resistance from the $69,000 level
From a technical perspective, Bitcoin’s price decline today is part of a failed attempt to scale higher after testing a key resistance from its old all-time highs at $69,000. This barrier has underpinned the BTC price over the last 10 weeks.
According to this setup, following the resistance line breach, the price could climb higher, potentially steering BTC towards all-time highs above $73,800 and later into price discovery.
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