Bitcoin Long Squeeze Drives Price Decline, Says CryptoQuant

Key points:

• Bitcoin’s price dropped by over 3% in the past 24 hours amid a “long squeeze” in the perpetual futures market, according to CryptoQuant data.
• The crypto market downturn coincided with growing caution in global equities as investors brace for potential interest rate hikes from the Bank of Japan that could impact overall risk sentiment.

Bitcoin’s price fell over 3% due to a “Bitcoin long squeeze” in the perpetual futures market, with $49M in liquidations as caution grows amid potential Bank of Japan rate hikes.

Bitcoin Long Squeeze Triggers $49M in Liquidations

Data from CoinMarketCap showed that Bitcoin’s price shed more than 3% in the last day after a “long squeeze” took place within the perpetual futures market. That had resulted in $49 million worth of long-position liquidations.

CryptoQuant shows that the futures market has been overheated, with open interest surpassing $19 billion. Whenever that happened, Bitcoin prices dropped, according to data from Coinglass.

Read more: Ohio Crypto Bill Now Advancing to Approve Bitcoin Tax

Market Caution Amid Bank of Japan Rate Hike Speculation

Global markets had turned cautious, as the leadership change in Japan flagged the prospect of interest rate hikes from the Bank of Japan, adding to downward pressure on risk assets, such as Bitcoin.

Investors were still on their toes, cautious about the repetition of July’s yen carry trade unwind that saw Bitcoin fall steeply. The market is now looking forward to further central bank actions.