The worst fears of risky assets, including cryptocurrencies, have come to an extent, increasing the risk of Bitcoin (BTC) falling below $74,000 in a move that could shake up long-leverage bets.
On Sunday, Coindesk discussed the potential for significant shortcomings volatility of risk assets, as there is a possibility of a reversal of the dynamic Treasury market arbitration gambling that catalyzed the crash in 2020.
According to the observer, the so-called carry trade rewind has begun to include hedge funds that take advantage of the mild price inconsistency between the Treasury future and securities. This is evident from the 10-year Treasury yields rose to 4.5%. Yields have seen similar rises over 30 years. Note that as investors are evacuated to government bonds, yields move in the opposite direction of price and usually drop during risk aversion.
“There is currently a 30-year Treasury yield on cusp of hitting the 5% mark, and it's all vertical now. In some context, the 10-year yield in the US was a low of 3.88% on Monday. The collapse of the basic trading.
Low added that “everything is lying down at this point” because yields themselves can have a widespread impact on markets, housing and the economy.
Stocks are falling and BTC is under pressure
Futures tied to the S&P 500, Wall Street benchmark equity index, fell 2% amid increased volatility in the Ministry of Finance market. Bitcoin has since recovered to below $75,000 for under $75,000 earlier today, then recovered to nearly $76,000 trading, according to Coindesk data.
According to data source TradingView, the Move Index, which represents the 30-day price turbulence selected in the Ministry of Finance market, jumped to 140, the highest since October 2023.
The worsening risk sentiment has increased the risk of BTC dropping to the 73.8k-$74.4K range, with holders of the bullish advantages of permanent futures listed in major exchanges facing liquidation risks, according to data tracked by Analytics Firm Hyblock Capital.
Liquidation represents forced closure of position due to exchange due to lack of margin. Big long liquidation is often added to the volatility of the lower price.
“We see long liquidation clusters (where we estimate liquidation to estimate liquidation) in the 73800-74400, 69800-70000, 66100-67700. In particular, we talked about retail halt losses below 70K and liquidity at the liquidity of the liquidity at the liquidation level, especially if we reach 70K.
High Block has identified $80,900-$81,000, $85,500-$86,700, and $89,500-$92,600 as prominent zones of potential short liquidation.
