Updated Jun 25, 2026, 3:04 p.m. Published Jun 25, 2026, 3:03 p.m.
2 min read
Summary
- Bitcoin quickly plunged 5% to $58,000 in early Thursday U.S. trading, its lowest level since 2024.
- Derivatives and order-book data show crowded short positioning and stronger buy orders below the market, suggesting conditions are ripe for a short squeeze despite bitcoin’s ongoing downtrend.
Bitcoin BTC$61,646.55 started the Thursday U.S. session with a fast 5% plunge to $58,000, its weakest level since 2024.
The largest cryptocurrency has since bounced to $59,400, down 2.5% over the past 24 hours. The selloff spread across the broader crypto market. Ether (ETH) dropped to around $1,550, down 5.5%, while solana (SOL) and DOGE$0.07281 posted similar declines.
The move came as memory chip maker Micron (MU) soared following strong earnings Wednesday evening, but much of the rest of mega-cap tech fell, leaving the Nasdaq down 0.4%.
Markets continue to digest not only the capital demands of the AI boom, but the Fed's surprisingly hawkish turn last week under new Chairman Kevin Warsh.
Policymakers signaled that their next move is almost surely going to be a rate hike rather than a rate cut, and that hike could come far sooner than markets had previously expected.
Poised for short-squeeze
While bitcoin remains in a sharp downtrend dating back to October, derivatives data points towards some short-term relief.
The liquidation heatmap shows a bulk of clustered liquidation risk above current prices, not below. That means that a move to the downside is unlikely to be amplified by a cascade of forced selling; the real danger is for those positioned short.
Open interest has risen roughly 0.28% over the past 24 hours, even as price fell by around 3% - signaling that traders aren't closing their shorts, they're doubling down and betting on a breach of the $58,000 level of support. Funding rates are also negative, another sign that the market is paying a premium for downside exposure.
Spot market depth reinforces strength beneath a delicate surface; CoinGlass data shows that there is a total of 6,900 BTC ($409 million) sat in bids on the order book between the current price and $50,000, while there are just 1,570 BTC ($93 million) in resting sell orders between the current price at $70,000, creating a bullish skew in terms of supply.
Typically, in scenarios like this, when a clearly overcrowded trade is identified, astute traders and market makers will target that weakness and move the price in the other direction. This could lead to those in shorts closing their positions to avoid paying funding and prevent liquidation.
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