What crashed Bitcoin? Three theories behind BTC's trip below $60K

💡 DMK Insight

Hedge funds in Hong Kong are driving Bitcoin’s recent sell-off, and here’s why that’s crucial for traders: The sharp decline in BTC, now at $69,241, signals a shift in market sentiment largely influenced by leveraged positions taken by these funds. When hedge funds leverage their bets, they amplify both gains and losses, which can lead to increased volatility. If these funds begin to unwind their positions, it could trigger a cascading effect, pushing BTC lower and potentially dragging down correlated assets like Ethereum. Traders should keep an eye on the funding rates and open interest in futures markets to gauge whether this trend is stabilizing or worsening. But here’s the flip side: if these hedge funds start to cover their shorts, we could see a rapid rebound. Key levels to watch are the support around $67,000 and resistance at $72,000. Monitoring these levels will be essential in determining the next move for Bitcoin, especially as we approach the end of the month, which historically has seen significant price action.