BTC price drop driven by leverage liquidations, analyst says

The recent sharp drop in BTC's price was driven by excessive leverage positions, according to Diana Pires, chief business officer at sFOX. In an analysis reported by The Block, she explained that as selling pressure mounted on long positions accumulated over recent weeks, BTC experienced a sharp downturn. Pires added that rapid leverage liquidations can cause the derivatives market to react ahead of the spot market, amplifying volatility and short-term declines. The Block also noted that the macroeconomic environment is becoming increasingly unfavorable, with traders now pricing in a 60% chance of a U.S. Federal Reserve rate hike by the end of 2026. The outlet pointed out that oil prices remain near triple-digit levels amid a de facto blockade of the Strait of Hormuz, and the next Fed chair will inherit a situation where the inflation target has been missed for five consecutive years. The market's base outlook for the second half of this year is shifting from rate cuts and a soft landing to a regime that must prioritize defending inflation credibility, The Block added.