$1.6 billion liquidated after Bitcoin briefly falls under $54,000

Bitcoin fell to under $54,000 in the morning hours amidst a broader sell-off in the crypto market. The asset later recovered slightly and traded over $54,700 at press time.


Data from markets tool Bybt showed over $1.6 billion worth of crypto positions were ‘liquidated’ as a result of the price plunge, with $953 million worth of Bitcoin positions and $255 million worth of Ethereum positions erased in the price carnage.

Traders borrow money from exchanges (a process called margin trading) to place bigger bets on their directional positions. The exchanges charge fees in return and automatically close out positions if the market moves against the direction that the trader placed his trade, in a process known as “liquidation.”

Over 234,000 traders were liquidated this morning, Bybt showed, with the single largest liquidation order coming from crypto exchange Huobi—a Bitcoin position worth over $10 million. Bitfinex saw the biggest liquidations with over $747 million in positions liquidated.

The market has since steadied. As the below image shows, Bitcoin is currently sitting on support after bouncing from the $54,000 level. The RSI indicator shows the asset is currently “oversold,” meaning the downward price action could be overextended.

What does on-chain data say?

On-chain data from analytics tool IntoTheBlock show a “mostly bearish” sign for the asset, with three metrics flashing a “red” sign and just two showing a “green” signal. Bitcoin’s net network growth, a tool that calculates momentum, shows bearish growth at -0.46% alongside the falling “large money transactions” at -0.76%.

Accumulation metrics remain “neutral,” meaning large holders are either dumping their Bitcoin or hoarding more of the asset depending on the entry/exit strategy. Over $11 billion have, in addition, left crypto exchanges in the past week while $12 billion has flowed in.

Meanwhile, there could be a further drop ahead. Rafael Schultze-Kraft, the co-founder of markets tool Glassnode, said he wouldn’t be surprised if the market were to dip further.

“Not much Bitcoin realized between here and $51k. Would not be surprised if we dipped a bit more. Strongest on-chain support currently at $47,400,” he tweeted.

Bitcoin investors are arguably not going to like that.

Get an edge on the cryptoasset market

Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.

Real-time charts

Price snapshots

More context

Join now for $19/month Explore all benefits

Like what you see? Subscribe for updates.

Source link

Latest articles

‘Omicron,’ ‘dogecoin’ top list of 2021’s most mispronounced words

"Cheugy" is apparently a lot to chew on. Grammy Award-winning singer-songwriter Billie Eilish and Philadelphia Eagles center Jason Kelce have something in common...

TA: Bitcoin Consolidates Gains, Why Dips Could Be Limited Below $50K

Bitcoin extended its recovery above $51,000 against the US Dollar. BTC must remain stable above $49,500 to continue higher in the near term. Bitcoin...

Bitcoin Rises on Encouraging Omicron News Before Falling Back; Ether Drops Slightly

Bitcoin (BTC) is attempting to reverse its weekend sell-off, although the cryptocurrency’s price could face short-term resistance around $53,000-$55,000. BTC was trading around...

Related articles

Leave a reply

Please enter your comment!
Please enter your name here