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Bitcoin’s $62K Stumble Tied to Futures Market Shake-up
- Bitcoin fell over 4.40% due to a long squeeze in the perpetual futures market, according to Brave New Coin's Bitcoin Liquid Index.
- Crypto experts are raising concerns due to expectations of another interest rate hike from the Bank of Japan, which historically affects cryptocurrencies.
- Long squeezes intensify selling pressure and further drive down prices, triggering additional margin calls and forced liquidations, amplifying the downward momentum.
- In the past 24 hours, a total of 67,689 traders have been liquidated, resulting in total liquidations across centralized exchanges amounting to $188.38 million.
- Bitcoin led the cryptocurrency market in these liquidations, with nearly $48.49 million wiped out during this period, highlighting the impact of the long squeeze on bullish traders.
- The futures market shows signs of overheating, with open interest around $19.1 billion.
- Since March 2024, open interest has exceeded $18.0 billion only six times, with each instance followed by a price decline.
- Investors are wary of a repeat of the yen carry trade unwind that occurred in late July.
- This event caused panic in financial markets and led to Bitcoin’s rapid plunge from $70,000 to below $50,000 within days.
- Looking ahead, traders and investors will be closely monitoring central bank policies and their implications for both traditional and digital assets.
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