Bitcoin has dropped to $63,000, raising concerns about potential liquidations as the dollar strengthens and equities weaken in global markets. A critical support level lies at $60,000; breaking below this threshold could trigger further sell-offs, possibly leading to a decline toward $52,500. The cryptocurrency has seen a 4.7% drop over the past 24 hours, continuing a downward trend that began earlier in the week.

This decline in Bitcoin's price reflects a broader risk-off sentiment among investors, who have been reacting to weakening U.S. equities and a strengthening dollar index (DXY), which has risen by 0.5% since early Monday. As Bitcoin approached the $63,100 mark, its lowest level since February 6, analysts noted that the price action resembles a "slow bleed" typical of previous cryptocurrency bear markets. A break below the critical support level of $60,000 could open the door to further liquidations and a potential slide down to around $52,500, a historical support level dating back to 2021.

The altcoin market is similarly affected, with BCH experiencing an alarming 11.5% decline and other tokens like APT, ATOM, and SUI falling between 5% and 8%. This sell pressure coincides with a lack of liquidity in the market, as investors appear to be moving into stablecoins to mitigate losses. In a notable shift, the decentralized finance (DeFi) market's total value locked (TVL) has held up better than token prices, indicating a potential rotation in strategy among traders looking to preserve capital amid falling prices.

Despite the adverse price action, the average crypto relative strength index (RSI) is flashing an "oversold" signal, suggesting there might be a chance for a short-term bounce in the low $60,000 region. However, the immediate sentiment remains cautious as the market navigates through this phase of heightened volatility.

Derivatives data reflects a significant decrease in notional open interest in crypto futures, with numbers dropping over 4% to $92.5 billion, the lowest level since early April 2025. This trend highlights a continued de-risking by investors, who are moving capital out of leveraged products. The situation has led to liquidations totaling $360 million within a 24-hour period, predominantly affecting long positions. Bullish bets faced the brunt of these liquidations, accounting for over 90% of total liquidations across several exchanges, including Hyperliquid, HTX, Aster, Bitmex, and Bitfinex.

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As bearish sentiment grows, some traders are increasingly shorting Bitcoin in this weak market. This shift is evident from the increase in global open interest in Bitcoin futures, which has risen to 690.89K BTC, marking the highest level since February 6. Similarly, ether futures are also seeing a similar trend, with annualized funding rates in perpetual contracts tied to major tokens remaining below zero, indicating a bias towards bearish, short positions. Notably, TRX and TRON have funding rates as low as -35%, signifying a market that is slowly becoming overcrowded with shorts.

The heightened volatility is further underscored by the rising 30-day implied volatility indices for Bitcoin and ether, which have reached two-week highs. On Deribit, Bitcoin and ether put options are trading at over 10 volatility premium to calls, signaling increased concerns about an extended price selloff. Additionally, block flows have featured BTC put spreads and straddles, indicating a bearish strategy with a limited-profit, limited-loss profile, while straddles represent a bet on volatility.

Amidst this tumultuous backdrop, the altcoin market continues to suffer from a lack of bullish catalysts. With the exception of pippin (PIPPIN), an AI-related token that has doubled in value since the start of the year and rose by 7.7% in the past 24 hours, the overall sentiment remains bleak. The decentralized finance (DeFi) market has lost significantly less total value locked (TVL) than the value of assets has depreciated, suggesting that traders and investors are actively moving to stablecoins to mitigate risk. This trend has resulted in a poor performance among DeFi tokens, with CoinDesk's DeFi Select Index (DFX) losing 34.8% since the start of the year, making it the worst-performing benchmark in the crypto space.

Layer-1 tokens like Aptos (APT), Cosmos (ATOM), and SUI have all seen declines ranging from 5% to 8% over the past 24 hours, as the altcoin market grapples with diminishing liquidity and relentless waves of sell pressure. This environment raises critical questions about the potential for recovery and the sustainability of current price levels as the market seeks to find its footing in a challenging economic landscape.

As the situation continues to evolve, investors are keenly watching for signs of stabilization and any potential catalysts that could shift market dynamics. The ongoing volatility underscores the precarious nature of the crypto market, as both Bitcoin and altcoins navigate through uncertain terrain, highlighting the intricate interplay between broader economic forces and cryptocurrency valuations.