It has been a bloodbath on Wall Street on Tuesday, with top US indices like the S&P 500 correcting more than 2%. The Bitcoin price is also facing strong correction dropping another 4.5% and moving to $56,500 levels leading to a surge in the BTC long liquidations.
Bitcoin Liquidations Surge With Chances of 75% Crash
In correlation with the S&P 500, the BTC price has been facing strong selling pressure with Bitcoin long liquidations on the rise in the last 24 hours. Citing data from Coinglass, popular crypto analyst Ali Martinez noted that $246.64 million in liquidation leverage is likely to get wiped out if the BTC price drops under $56,840 levels. As of press time, BTC is already trading under those levels.
$246.64 million will be liquidated if #Bitcoin drops to $56,840! pic.twitter.com/Z0tRcZEDAU
— Ali (@ali_charts) September 3, 2024
Additionally, Ali Martinez has also issued a cautionary observation on the current BTC price trajectory. The analyst pointed out the Stochastic RSI on Bitcoin’s 2-month chart that signals a major shift from the bullish to the bearish trend.
He also stated that over the past decade, similar signals have preceded major corrections with BTC seeing declines of approximately 75.50%. Thus, if the historical patterns repeat, Bitcoin investors should prepare for significant downturns going ahead.
Courtesy: Ali Martinez
Popular trader Peter Brandt turned bearish on Bitcoin citing the lack of momentum while pointing out a series of lower highs and lower lows for the BTC price. He shows that this market structure shows a lack of major buying interest that could drag the BTC price even lower.
On the other hand, the spot Bitcoin ETF outflows have skyrocketed to more than $287 million on Tuesday, as institutional players seek to move from risk-ON assets.
Key Developments Dragging S&P 500 Down
On Tuesday, the US DOJ issued a subpoena to chipmaker Nvidia sending shockwaves across Wall Street with the S&P 500 slipping by 2.12%. The Nvidia stock price crashed 10% leading to a major fall for other big tech companies as well.
This led to a strong crypto market crash on late Tuesday with BTC and altcoins crashing anywhere between 4-10%. All eyes will be on the US Federal Reserve expected to cut interest rates by 50 bps later on September 18.
It will be interesting to see whether the BTC price rebounds from here or whether the bears strengthen their grip moving ahead.
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