Time to Exit and Take Profits?

The cryptocurrency market experienced a significant amount of forced liquidations totaling over $841 million in the last 24 hours leading up to Friday, May 30. Bitcoin’s price fell below $105k, causing a ripple effect in the wider altcoin market, particularly impacting memecoins and leading to heavy forced liquidations of long-leveraged traders.

Coinglass market data revealed that more than $747 million in forced crypto liquidations were attributed to long traders, with whale-long traders like James Wynn triggering further short-term pessimism. Short crypto traders also saw around $80 million in forced liquidations during this period, heightening the possibility of a long squeeze despite some overall optimism for a market rebound over the weekend.

Looking ahead, there is still optimism for a potential crypto rebound in the near future despite the current market downturn. Bitcoin’s fear and greed index hovering around 60 percent indicates a sense of greed among crypto traders. Additionally, the improving regulatory landscape in major jurisdictions, particularly in the United States, has attracted more institutional investors to the web3 space, bolstering expectations for a bullish rebound and possibly a parabolic rally in the near term.

Nevertheless, the prevailing bearish sentiment could potentially delay a bullish rebound, especially if Bitcoin’s price dips below $100k again in the coming days. However, a significant surge in bearish traders could trigger a major short squeeze if Bitcoin’s price manages to climb back above $110k. The overall bullish outlook for crypto is supported by increasing adoption from institutional investors and favorable regulatory developments in key jurisdictions.

In light of these factors, it may be wise to adopt a cautious “wait-and-see” approach in the days ahead, particularly if Bitcoin’s price remains above $96k. By staying informed and monitoring market trends, investors can position themselves strategically for potential opportunities in the evolving cryptocurrency landscape.