Bitcoin plunged 5% to $58,000 early Thursday-its lowest level since 2024-amid a broader crypto selloff. Ether dropped to around $1,550, down 5.5%, while solana and dogecoin posted similar declines.
The move came as Micron’s strong earnings failed to lift mega-cap tech, leaving the Nasdaq down 0.4%. Markets are grappling with the capital demands of the AI boom and the Federal Reserve’s hawkish turn under new Chair Kevin Warsh. Policymakers now signal that the next move is likely a rate hike-not a cut-sooner than previously expected.
Despite the downtrend, derivatives and order-book data point to a potential short squeeze. The liquidation heatmap shows more risk above current prices than below. Open interest rose even as price fell, indicating traders are adding to short positions. Funding rates are negative, signaling a premium for downside exposure.
CoinGlass data reveals 6,900 BTC ($409 million) in bids between the current price and $50,000, against just 1,570 BTC ($93 million) in sell orders up to $70,000-a bullish supply-demand skew. Such conditions often lead market makers to target overcrowded shorts, triggering a sharp upward move.