The recent slump of Bitcoin to $60,000 can be traced back to an influx of traders entering new long positions, according to renowned Bitcoin analyst Willy Woo. This phenomenon, known as a "cascading long squeeze," has driven Bitcoin to its lowest value in 53 days as miners continue their selling spree.

Woo elaborated on this in a June 24 post on X (formerly Twitter), explaining that speculators piling into new long positions provided the "fuel" for a series of liquidations. This, in turn, triggered the cascading long squeeze. Essentially, a long squeeze occurs when a significant number of investors holding long positions (anticipating a rise in Bitcoin’s price) start selling off their holdings as prices begin to drop, aiming to minimize their losses. This selling pressure leads to further price declines, prompting more long-position holders to liquidate, thus creating a domino effect.

The opposite scenario, a short squeeze, gained widespread attention during the GameStop stock frenzy in January 2021. During that event, retail traders drove up the stock price, forcing investors with short positions to buy back at higher prices, consequently pushing the stock to unprecedented heights.

CoinGlass data underscores the impact of Bitcoin's drop below $60,000. When Bitcoin dipped below $59,000 on June 24, it resulted in a liquidation of $1.16 billion in long positions. Conversely, a similar 3.73% increase in price would have liquidated $2.18 billion in short positions, indicating a current market sentiment favoring downward movement.

Willy Woo commented on the prevailing fear in the market, suggesting that the situation warranted a detailed examination. This sentiment is reflected in the Crypto Fear and Greed Index, which has plummeted to its lowest level in nearly 18 months, signaling significant fear among investors.

Another factor contributing to the decline is the ongoing "post-halving miners capitulation." Woo described this as a scenario where miners, facing unprofitability as Bitcoin prices fall below certain thresholds, are forced to shut down their operations and sell their coins. This exacerbates the selling pressure in the market. Woo noted that miners are offloading Bitcoin to fund necessary upgrades, while weaker miners are being driven out of business.

As of June 25, Bitcoin's price hovers slightly above the critical $60,000 mark, trading at $61,320, according to CoinMarketCap data. This follows Bitcoin's steepest daily decline in over three months on June 24, when it fell 6.26% to $58,890. Crypto commentator Bitcoin Archive highlighted this as the most significant daily drop in 97 days.

Jan3 CEO Samson Mow weighed in, attributing the dip to market sentiment and fear rather than the liquidation of large holdings. Mow's perspective suggests that the recent downturn is driven more by investor psychology than by substantial sell-offs from major Bitcoin holders.