Bitcoin steadies around $57,000 after liquidations on Defi platforms exceed $17.94 million

The German Government transferred another 1,000 BTC, valued at $55.8 million, on Monday.
On-chain data shows that liquidations on Defi platforms exceed $17.94 million.
Bitcoin Exchange netflow records the highest outflow of 68,498 BTC since November 23, 2023.

Bitcoin (BTC) struggles against resistance near the $58,500 level but still trades up 2.93% at $57,515 on Monday. On-chain data shows that liquidations on Defi platforms exceed $17.94 million, and Exchange netflow records the highest outflow of 68,498 BTC since November 23, 2023. Meanwhile, the German Government transferred an additional 1,000 BTC, valued at $55.8 million, on the same day.

Daily digest market movers: Bitcoin marked the highest Exchange outflow in 2024

According to data from Lookonchain, the German Government transferred 1,000 BTC, valued at $55.8 million, from its wallet on Monday. Of this, 500 BTC, worth $27.9 million, were transferred to Coinbase and Bitstamp.
Since June 19, the German Government has transferred 13,466 BTC, equivalent to $819.3 million, while still holding 39,826 $BTC valued at $2.29 billion. This notable transfer activity has potentially contributed to FUD (Fear, Uncertainty, Doubt) among traders, likely influencing Bitcoin's recent decline in price over the past few weeks.

The #German government transferred 1,000 $BTC($55.8M) out again 15 minutes ago, of which 500 $BTC($27.9M) was deposited to #Coinbase and #Bitstamp.

The #German government currently holds 38,826 $BTC($2.17B).https://t.co/h2JlBVFPsL pic.twitter.com/NS5pkMixrj
— Lookonchain (@lookonchain) July 8, 2024

According to CryptoQuant data, Bitcoin Exchange netflow is the difference between BTC flowing into and out of the exchange (Inflow -outflow = netflow).

On Friday, Bitcoin recorded a negative netflow of 68,498 BTC, the highest since November 23, 2023. This surge in outflows, prominently visible on the chart below, indicates a significant movement of Bitcoin away from exchanges, a trend often perceived as bullish by investors. The prevailing sentiment is that major holders are transferring their Bitcoin to wallets, possibly signaling expectations of price increases or a preference for long-term holding rather than immediate selling.

Bitcoin Exchange Netflow chart

According to data from Santiment's Defi liquidations on Aave and Compound Finance, the recent BTC price drop from a July 4 peak of $60,498 to a July 5 low of $53,485 resulted in over $17.94 million in liquidations on Defi platforms. Historically, such liquidation spikes are typically followed by market recoveries driven by forced selling and strategic purchasing by key stakeholders.

Santiment Defi Liquidation chart

Technical analysis: BTC faces resistance around $58,500 level

Bitcoin's price encountered resistance at the weekly resistance level of $58,375 on Saturday, resulting in a 4% decline the next day. By Sunday's close, it had fallen below the May 1 low of $56,552 and trades around $57,515, 2.93% up on Monday.

If BTC's weekly level at $58,375 acts as resistance, it could decline 5% to revisit the daily support at $52,266.

The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart support this bearish thesis, as both indicators are below their respective neutral levels of 50 and zero.

This suggests continued momentum favoring bears, potentially leading to a further decline in the Bitcoin price.

Additionally, if the bears are aggressive and the overall crypto market outlook is negative, BTC could extend an additional decline of 3.3% to retest its February 23 low of $50,521.

BTC/USDT daily chart

However, if BTC closes above the $58,375 weekly resistance level and forms a higher high in the daily time frame, it could indicate that bullish sentiment persists. Such a development may trigger a 9.7% rise in Bitcoin's price to revisit its next daily resistance at $63,956.

Cryptocurrency metrics FAQs

What is circulating supply?

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

What is market capitalization?

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

What is trading volume?

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

What is funding rate?

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.

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