Prepare for a bullish continuation as crypto selloff is viewed as a brief shakeout
The cryptocurrency market took a hit following unexpected U.S. employment figures showing a surge of 272,000 new jobs in May, surpassing the anticipated 185,000. This indicates that the economy is adapting well to higher interest rates, decreasing the likelihood of rate reductions, which in turn affects investments in digital currencies.
Moreover, GameStop (NYSE: GME) saw a 40% drop in its stock price after reporting a $32.3 million loss on $882 million in revenue. The company also revealed plans to sell $175 million in shares, contributing to market uncertainty.
Bitcoin (BTC) experienced a significant decline from its recent high near $72,000, with the entire crypto market following suit, as per CoinMarketCap data. This market downturn resulted in $411.05 million in liquidations, including a massive single order of $409.51 million on the OKX crypto exchange, with $56.8 million belonging to long Bitcoin positions.
Traders are now preparing for further drops in prices, with potential liquidations if Bitcoin falls back to $71,000 wiping out $1.40 billion in short positions, indicating a belief among futures traders in ongoing volatility.
Despite the market downturn, some traders interpret the sell-off as a short-term shakeout rather than a prolonged bearish trend. Noted crypto trader il Capo of Crypto described the current situation as a “shakeout,” where investors swiftly sell off assets due to uncertainty.
Market analysts are monitoring key support levels closely to determine the market’s next direction. The monthly open around $67,500 is considered crucial for Bitcoin to maintain its bullish momentum.
Experts like Markus Thielen, head of research at 10x Research, see the current dip as a buying opportunity, especially with the upcoming Consumer Price Index (CPI) report being a potential game-changer. Pseudonymous trader Kaleo and others remain positive about the market’s future, suggesting that the recent sell-off is just a temporary setback.
As traders and investors navigate through this turbulent period, the prevailing sentiment leans towards a bullish continuation, with many viewing the recent downturn as a momentary blip rather than a long-lasting decline.
