Bitcoin Falls to US$60,000, INDODAX: Institutional Selling and Large Liquidations Are the Culprits

Vice President of INDODAX, Antony Kusuma. (Photo: Special)

JAKARTA - The price of Bitcoin (BTC) fell sharply and briefly touched the level of 60,000 US dollars on Friday, February 6 trading. Strong selling pressure dragged Bitcoin to an intraday low of around 60,000 US dollars before fluctuating, with a nearly 30 percent drop in the past week. This was triggered by a combination of a wave of liquidation of leveraged positions and increased selling pressure from institutional investors.

In the last 24 hours, the total liquidation in the crypto market was recorded to exceed 1.8 billion US dollars, with the majority coming from long positions. More than 500 thousand traders were affected, including one Bitcoin position worth more than 12 million US dollars that was liquidated on the global exchange.

Vice President of INDODAX, Antony Kusuma, said this condition showed a rapid market reaction amid liquidity pressure.

"When selling pressure occurs simultaneously, the crypto market can move very quickly because many positions are closed at the same time," said Antony.

The liquidation action in the crypto market was also followed by a sell-off from major investors. This is seen from the activity in the Bitcoin exchange-traded fund (ETF) market. BlackRock's Bitcoin spot ETF, IBIT, recorded the highest daily trading volume with transaction values exceeding 10 billion US dollars. The surge in activity occurred simultaneously with the decline in IBIT prices and was followed by a large amount of fund withdrawals, indicating that institutional investors are also selling their holdings.

From a technical perspective, Antony assessed that Bitcoin's movement also showed significant weakness. "Bitcoin has lost support areas in the range of US$65,000 to US$62,000. The collapse of that level triggered a series of stop-losses and opened the room for a decline to the US$60,000 area," said Antony.

The price weakness is not only happening to Bitcoin. Ethereum (ETH) has fallen below $1,800, while Solana (SOL) has broken through the $70 level for the first time since December 2023. This pressure shows widespread selling in the crypto market.

Antony emphasized that the current weakness is not only experienced by the crypto market.

"What happened today is not just about crypto. Pressure is also seen in the technology stock market and other risky assets. Where, when global investors reduce risk exposure, crypto is usually also affected," he said.

Antony explained that the condition reflects the risk-off phase in the global market, where investors began to reduce their holdings of risky assets amid tightening liquidity and the release of disappointing economic data from a number of countries.

Regarding the next movement, Antony emphasized that the direction of Bitcoin in the near future will depend heavily on the stability of the global market and investor response to macroeconomic conditions.

"As long as global sentiment is not stable, Bitcoin's movement will still fluctuate easily," he continued.

Even though the pressure is still strong, Antony considers that market conditions like this need to be handled more carefully.

"Because the movement of crypto prices can change very quickly, market participants need to always pay attention to risk management and follow the development of global economic news that can have a direct impact on the market. In addition, it is also important to continue to enrich understanding, including from the technical side, by utilizing information and education resources that are available for free, such as through INDODAX Academy, so that decision-making is more measurable," explained Antony.

In the midst of still high volatility, Antony assessed that a gradual approach such as dollar cost averaging (DCA) could be one way for market participants to respond to current conditions.

"In a market situation that is not yet stable, a gradual purchase strategy can help reduce the pressure from short-term price fluctuations. The important thing is to keep adjusting to each other's capabilities and risk profiles. We also never get tired of reminding that investments are made using funds that are indeed prepared for it or cold money," concluded Antony.