There is a storm on the crypto market and the damage is great. Bitcoin (BTC) suffered a major drop yesterday, not to mention the situation with altcoins. The market crash has of course hurt investors a lot, but it is active traders in particular who prefer to erase the day from their memory as quickly as possible.
In total, nearly $1.6 billion has been flushed from the market due to liquidations – accelerating the decline.
More than 500,000 crypto traders affected
Since Sunday night, the Bitcoin price has continued to decline. It started from $101,000, and initially Bitcoin seemed to find support at $98,000. The price even shot back to the magical $100,000, but then fell even faster.
Around 9:00 PM, Bitcoin dipped below $97,000 and an hour later the pressure was increased much further. In no time, Bitcoin crashed to a low of around $94,000, which had not been seen since last Friday.
This ‘flash crash’ appears to be the result of a cascade of long positions being liquidated.
Traders who speculated on a price increase with borrowed money (leverage) were forced to sell their positions at lower prices to cover the losses. This increases the selling pressure and causes more liquidations. This creates a chain reaction that causes the price to plummet in a short time.
Data from Coinglass shows that a whopping $1.59 billion worth of crypto has been liquidated in the past 24 hours, with more than 511,000 traders affected. The lion’s share – $1.39 billion to be precise – comes from long positions.
It is the largest wave of liquidations in more than three years. Last Thursday, $1.1 billion was also flushed from the market, when Bitcoin fell from $104,000 to a low of $90,800.
Bitcoin and crypto market catch their breath after crash
Bitcoin has rebounded strongly and has been trading above $97,000 for many hours now. That is only 1% lower than 24 hours ago. And if Bitcoin manages to climb further by 3%, it will be above $100,000 again.
But in any case, the crypto market is once again playing with the emotions of investors. Thanks to the rising prices, there is more and more trading (also with leverage), and therefore the volatility is a lot higher.
Earlier today you could also read in the altcoin news that altcoins have already experienced significant declines. Ripple (XRP), Dogecoin (DOGE) and Cardano (ADA) lost no less than 15% in a short time, but are now looking a little less sad.
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