Bitcoin, which dropped below $ 77,000 with a sudden drop last weekend, once again revealed the structural fragilities in the market. The fact that nearly 100 million dollars of long positions were liquidated in a short time indicated that liquidity was lost in the market, especially on weekends. It is stated that the inactivity of institutional market makers in this process made the price movements even more severe.
Market fragility and mechanical risks
It is stated that this harsh movement experienced over the weekend is not only due to negative news, but also to the market structure that is becoming increasingly disjointed. The Bitcoin market, which has deep liquidity especially on weekdays, becomes a quiet environment far from its peak on weekends. Experts working in institutions such as Binance and OwMarket emphasize that the gaps in “liquidity sensitivity” have not yet been closed.
According to expert opinions, Bitcoin still remains an asset with a risk of high volatility on weekends. As institutional support weakens during this period, the effects of macroeconomic and geopolitical developments may be more serious. In addition, comments stand out that movements in the range of $ 74,000 to $ 82,000, where leveraged positions are concentrated, may herald a new sales wave.
If there is a 20-30 percent increase in open positions in Bitcoin within two days and the price does not rise in parallel, there may be serious liquidation pressure in the next 72 hours. In addition, continuous swap interest rates rising above 0.1% or falling below -0.05% are considered as signs of new liquidation risks.
Fragile market structure and sudden fluctuations
The decline experienced over the weekend showed that a standard retrenchment process can turn into a much bigger shakeup. When the active market makers who were influential in the market were disabled, the mass closing of over-leveraged long positions by automated systems created a rapid selling wave.
When prices fell below the major psychological level of $77,000, selling accelerated due to the lack of more buyers. After this, Bitcoin functioned more like a source of cash than a safe haven status. Research institutions such as Kaiko Research and BIS emphasize that the market is liquid and efficient on weekdays, especially with the influence of ETFs, but the depth is lost on the weekend.
It is stated that the market may quickly reprice as institutional investors return on Monday. This is called the “Monday Catch-up” effect and it is observed that the volatility experienced over the weekend results in new balance levels at the beginning of the week.
Researchers state that seeing a daily close in the $74,000-74,259 region is an important technical threshold. If it falls below this level, there may be a risk of withdrawal up to $60,000.
Macro developments and Bitcoin’s correlation with stocks
The dollar gained strength after the announcement of Kevin Warsh’s candidacy for the presidency of the US Federal Reserve. The expectation that Warsh would take a stance in favor of tightening monetary policy increased the pressure on Bitcoin while pushing the dollar index up.
On the geopolitical side, the failure of the peace talks between the USA and Iran in Pakistan and the subsequent blockade of the US navy in the Strait of Hormuz pushed oil prices to the 95-110 dollar range. Despite this, there was no trend towards Bitcoin as a safe haven; Rather, institutional investors sold Bitcoin and technology stocks together to hedge.
Bitcoin’s greater integration into the equity market with spot ETFs leads to the currency moving more in line with technology stocks. Macroeconomic fluctuations, in particular, put similar pressures on Bitcoin, as do stocks in both the software and semiconductor sectors.
