Bitcoin experienced a sharp decline of over $1,600 within an hour on Aug. 1, as volatility struck the market.

Data from TradingView depicted a challenging scenario for long traders on Aug. 1, with BTC suddenly dropping from $64,000 to $62,800.

At the time of writing, the losses continued to accumulate after the BTC/USD pair reached lows of $62,212 on Coinbase, levels not seen in two weeks.

Those betting on Bitcoin’s recovery faced significant losses on Aug. 1, as the downturn resulted in the liquidation of long positions worth $310.27 million within a 24-hour total wipeout of $337 million, according to Coinglass data.

Over the last 24 hours, more than $77.07 million worth of long Bitcoin positions were liquidated, with $26.6 million being wiped out in the past four hours alone.

The largest single liquidation occurred on the OKX crypto exchange, involving an ETH-USDT swap worth $4 million.

For market analyst DW, the liquidation of positions was not “extreme” despite the sharp downward move.

DW noted that the market has returned to a state of low liquidity, advising caution regarding high selling pressure moving forward.

He added: “Mt. Gox is not behind us. It is the summer, and post BTC 2024, it is back to low liquidity, so whatever selling is happening will be magnified.”

Meanwhile, independent analyst Mags offered a more optimistic perspective on Bitcoin, noting that the price was holding above a critical moving average support as it traded near the upper boundary of a descending broadening wedge, commenting:

“The hash ribbons have also printed a buy signal,” stated Mags in an X post on Aug. 1.

According to Mags, the current BTC price action is a short-term pullback that resembles previous instances when the ribbons turned green, followed by significant upward moves:

“The price dipped immediately after, followed by some consolidation and a nice V-shaped recovery. As long as the price is holding above $60,000, dips are for buying.”

Bitcoin’s correction on the first day of August aligns with historical data showing that BTC typically performs weakly in August after a volatile July.

Historical data from Coinglass reveals that Bitcoin’s returns in August have averaged 2.24% since 2013.

In eight of the last 11 years, Bitcoin’s price closed August in the negative, with a median return of -6%.

Independent analyst Karen also highlighted this trend in an X post on Aug. 1, pointing to the sharp correction in Bitcoin's price.

Karen noted that Bitcoin had ignored 100% Fed rate cut odds, which were apparently “not enough to push the BTC price higher.”

Sources:

https://cointelegraph.com/news/bitcoin-long-liquidations-hit-300m-as-btc-price-falls-to-62k

https://www.tradingview.com/symbols/BTCUSD/

https://x.com/thescalpingpro/status/1819047094340186533

https://www.coinglass.com/today

https://x.com/Karen0z_/status/1819005321295331373