Bitcoin price drops to $62.5K as trader warns weekly close may spark more losses

Bitcoin's value has continued its descent toward new August lows, defying positive US inflation trends. As US stocks hit record highs, Bitcoin (BTC) plummeted to $62,570 on Friday, nearing its lowest point for the month. Despite encouraging inflation data lifting risk assets and reducing the likelihood of interest-rate hikes, Bitcoin failed to mirror the performance of US equities, which ended the day at all-time highs. The S&P 500 and Nasdaq Composite Index both saw gains of 0.11% and 0.14%, respectively.

Rekt Capital, a trader and analyst, warned that Bitcoin's weekly close needed to be above $63,220 to avoid a breakdown. The analyst pointed out that $63,000 had lost its support in August and had previously been considered resistance, similar to the 2022 bear market. The 50-month exponential moving average (EMA) at $65,827 has now taken on the role of resistance.

Onchain analytics platform Glassnode has reported a growing risk of a significant liquidation event for Bitcoin as it approaches a liquidity area around $61,000. In its latest newsletter, The Week Onchain, Glassnode noted that traders have added substantial risk, most of it long, into a market without corresponding demand. Additionally, investment firm QCP Capital highlighted that crypto markets have resisted rallying despite improving US inflation conditions, describing it as an "increasingly important" phenomenon.