Cryptocurrency price volatility continues to pose a challenge for investors. Early Monday, the price dropped to $54,200 before paring losses and climbing to $56,700, erasing gains from a peak of around $58,500 over the weekend.
The past few hours have been particularly turbulent, with significant volatility and liquidation hitting the market.
Massive liquidation operations
Despite promising attempts at recovery on Sunday, Bitcoin faced stiff resistance that led to a sharp decline. In just four hours, the market saw liquidations totaling $113 million, with $70 million of long positions and $42.64 million of short positions. Overall, around $250 million worth of positions were liquidated in the past 24 hours, indicating continued volatile conditions.
Avinash Shekhar, co-founder of crypto derivatives exchange Pi42, provided insight into the market volatility. He said that Bitcoin’s price is caught between bulls and bears. Sellers pulled the price to around $53,500 on July 5, but the lows attracted bulls. “The bears then pushed the price down again from $58,300 to $54,200 on the morning of July 8,” Shekhar added.
buy low
Meanwhile, Metaplanet, a Japanese investment firm, has made strategic moves to strengthen its position in the cryptocurrency market. On Monday morning, it announced the purchase of 42.47 bitcoins, equivalent to approximately $2.35 million.
This comes after the company announced on June 24 that it would issue $6.2 million in bonds to boost its Bitcoin holdings. The decision aims to bolster the company’s financial stability by incorporating Bitcoin as a reserve asset. The company seeks to mitigate risks associated with Japan’s economic challenges, including high government debt and persistently negative real interest rates.
Meanwhile, potential selling pressure from investors in the collapsed Mt. Gox exchange and the German government is looming. Recent reports suggest that Bitcoin addresses linked to German authorities transferred 700 BTC, worth $40.47 million, to an unidentified 139PoP address late last week.
The activity is part of several moves by the German government, which has recently moved large amounts of bitcoin to major exchanges such as Coinbase, Bitstamp and Kraken. The moves come on the heels of the seizure of 50,000 bitcoins earlier this year from movie piracy site Movie2k.
The balance between optimism and caution in the cryptocurrency market continues to generate debate and speculation among investors. However, sentiment is leaning more towards fear. The cryptocurrency Fear and Greed Index is at 28, which is the fear zone.
