Bitcoin Price Drops as Crypto Markets Erase Weekend Gains

Crypto markets traded lower on Tuesday for a second consecutive day.

Bitcoin (BTC) fell by 3% to $61,648, while Ethereum (ETH) dropped by 5%. Polkadot (DOT) was flat and Solana (SOL) dipped 2%.

According to data from CoinGlass, over 60,000 traders were liquidated in the last 24 hours, resulting in total liquidations of $143.85 million. Long positions, which are bets expecting prices to rise, were particularly affected. Ethereum longs worth $47 million and Bitcoin longs worth $21 million were among the liquidated positions.

FLOKI (FLOKI) emerged as the top gainer among the top 100 cryptocurrencies by market capitalization, with a 4% increase. Klaytn (KLAY) and Maker (MKR) also gained 2% and 1%, respectively. Sei (SEI), DogWhifhat (WIF), and Sui (SUI) were the worst performers, each dropping between 7% and 8%.

The bearish price action comes despite more than 45,000 Bitcoin being withdrawn from crypto exchanges on Aug. 27, making it the third-largest net exchange outflow of 2024 — only surpassed by July 5 and July 16, which recorded outflows of 52,000 and 68,500 BTC, respectively.

“Large negative netflows generally indicate a bullish sentiment, as they usually suggest that investors are transferring their Bitcoin off exchanges to potentially hold for the long term, thereby potentially reducing selling pressure in the market,” cryptocurrency analyst Amr Taha shared on CryptoQuant.

Jamie Coutts, chief crypto analyst at Real Vision, said that Bitcoin will soon enter the “banana zone” which could see BTC surge as high as $150,000 by the end of 2024.

“Unless something fundamentally has changed, we are entering what Raoul Pal refers to as the [banana] zone, or what I would describe as Bitcoin batsh*t season,” he tweeted.

The chart shared by Coutts suggests that Bitcoin could follow previous bull market patterns, doubling from its current price of around $64,000 to reach as high as $150,000 by the end of 2024. Historical data shows BTC surging after the US Dollar Index (DXY) peaks, with past gains of over 2300% in 2016-2017 and 1100% in 2020-2021.

Stock Markets Bounce

In traditional financial markets, equities bounced slightly on Tuesday as investors awaited major earnings reports due later in the week. The S&P 500 is up 0.2%, while the Nasdaq Composite climbed 0.4%.

Based on data from the CME Group’s FedWatch Tool, traders unanimously expect a rate cut at the central bank’s policy meeting in September, with predictions of at least a 25 basis point reduction.