- Almost 70K traders were liquidated recently, losing a total of US$166 million due to a significant drop in major cryptocurrencies.
- Market sentiment has shifted to mostly bearish for Ethereum, Dogecoin, and major stablecoins, with Bitcoin maintaining a mostly neutral stance.
- Analyst Michaël van de Poppe predicts further short-term declines for Bitcoin, potentially influenced by external factors.
- However, Anthony ‘Pomp’ Pompliano reminds us that activity typically slows during the summer in the northern hemisphere, with Q.4 promising to be a welcome change.
Amid the recent drop in most major crypto assets, many traders have been liquidated. According to data from Coinglass, close to 70K traders were liquidated and lost a total of US$166 million (AU$244 million), with the largest single liquidation costing a trader on Bybit US$3.52 million (AU$5.17 million).
Related: Sugar High: Arthur Hayes Predicts Bitcoin Surge, Cites US Rate Cuts and Shifts in Yen Carry Trade
With these rather grim numbers comes a change in market sentiment. The on-chain signals on IntoTheBlock for many major assets have recently changed to ‘mostly bearish’ for Ethereum, Dogecoin and major stablecoins, while Bitcoin remains ‘mostly neutral’.
On-chain signals for Toncoin, Tron and Cardano, however, remain ‘mostly bullish’. According to IntoTheBlock these signals are calculated daily and suggest the price movement of the following day – acting as a possible glimpse into the future.
Prepare for More Downward Movement, Says Analyst
Trader and analyst Michaël van de Poppe says it’s likely that we’ll see more pain short-term as he believes BTC may be testing the US$56K (AU$82.4K) mark as it has lost its support level at US$61K (AU$89.7K).
Van de Poppe suggests the drop may be due to the recent news around Telegram and TON – Telegram’s CEO Pavel Durov had been arrested in Paris while TON saw two outages in as many days – or potentially due to some rumours around Binance – specifically that the exchange had frozen accounts linked to Palestinians, which Binance CEO Richard Teng denied.
Pomp: “Sideways Summer” Could End Soon
Whatever it may be, we need to remember it’s still summer in the northern hemisphere. That’s a time usually spent outdoors and not behind a desk trading. As Anthony Pompliano, Professional Capital Management founder and CEO, calls it, this is a time known as “sideways summer”.
Speaking to CNBC’s Squawk Box, Pomp points to the run-up of Bitcoin earlier in the year when the exchange-traded funds (ETFs) got approved. At the time of approval in early January BTC traded for US$40-41K (AU$58.8-60K) making a new all-time high by March just to continue in a choppy sideways action ever since.
Related: Nasdaq Eyes Regulatory Nod for Bitcoin Index Options, Pending SEC Decision
According to Pomp, history tells us that around Q.4 is when the market should be picking up again. With that in mind, Pomp reminds traders and investors alike that short-term thinking can lead to mistakes.
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