As Bitcoin struggles to climb out of its current funk, several indicators suggest any breach of the $60,000 level would unleash a fresh bout of extreme turbulence.
The biggest cluster of bets in Bitcoin’s options market are contracts that pay off if the price falls below $60,000, according to data from Deribit. Just below that level is the token’s 200-week moving average — currently at just above $58,000 — seen by some technical analysts as a crucial support.
Many Bitcoin-backed loans are structured so that if the price falls toward that level, lenders automatically sell the collateral to cover losses, according to Maxime Seiler, chief executive of digital-asset trading firm STS Digital. That forced selling would push prices lower, triggering a cascade of leverage unwinding.
Bitcoin briefly flirted with $60,000 on Feb. 6 before staging a modest recovery.
“$60,000 is the key level to watch,” said Seiler. “A break under $60,000 could trigger forced deleveraging and hedging flows, creating a cascade effect. In that scenario, volatility would likely rise sharply as liquidations accelerate and traders rush to protect downside exposure.”