Bitcoin warning: What happens if price drops below $60K

Bitcoin is fast approaching the critical $60,000 mark amid record ETF outflows, leaving the cryptocurrency market at a major structural crossroads. While $60,000 is a significant psychological round number, experts warn that a dip below this threshold could trigger a massive, automated selloff due to institutional pressure and derivative market mechanics.

According to Jean-David Péquignot, Chief Commercial Officer at crypto options exchange Deribit, a massive wave of institutional money—including ETF buyers and short-term speculators—entered the market between $60,000 and $67,000 over the past year. With Bitcoin hovering near their break-even point, a drop below $60,000 would result in heavy paper losses. As high-performing AI stocks continue to rally in traditional markets, the opportunity cost of holding a losing crypto position could incentivize these institutions to dump their holdings, News.Az reports, citing Coin Desk.

Compounding the problem is a brewing storm in the derivatives market. Deribit currently holds over $1.2 billion in open interest for $60,000 strike put options, which investors purchased to protect against a crash. As Bitcoin drops toward this price, the market makers who sold those options will be forced to aggressively sell spot Bitcoin or futures to balance their own books. This mandatory institutional hedging risks turning a standard market dip into a chaotic downward spiral.

Furthermore, the crypto ecosystem remains heavily weighed down by leveraged long positions. While billions of dollars in bullish bets have already been wiped out recently, analysts warn that breaching the $60,000 floor will severely damage collateral metrics. This would likely ignite a cascading wave of automated liquidations, rapidly accelerating Bitcoin's downward momentum.

News.Az 

By Aysel Mammadzada