Liquidations amount to USD $300 million after Bitcoin price slide – DiarioBitcoin
By Hannah Perez
The cryptocurrency market is facing an aggressive cascade of liquidations as Bitcoin plunged to $57,000, touching five-month lows.
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- Bitcoin’s drop below $58,000 triggers a cascade of liquidations
- More than 100,000 cryptocurrency traders have been liquidated in the past 24 hours
- Most liquidations are from leveraged long positions
- A number of factors are adding bearish pressure on the crypto market
The cryptocurrency market is facing a massive wave of sell-offs amid widespread bearish price action that has seen Bitcoin fall to multi-month lows.
Bitcoin (BTC), the leading digital currency by market capitalization, sank below the $58,000 mark on Thursday, hitting its lowest price since February. Notably, BTC touched a price just below $57,100 in early morning trading (EDT) before a modest recovery.
The downward movement spread across the rest of the cryptocurrency market, with some tokens falling even further in percentage terms. Memecoins Shiba Inu (SHIB) and Dogecoin (DOGE), for example, saw losses of between 6 and 8% as the global cryptocurrency market cap lost 4%.
The volatility triggered a sudden surge in liquidations on centralized exchanges, which amounted to $300 million on Thursday. Specifically, Some $301 million in liquidations of leveraged cryptocurrency positions have occurred in the last 24 hoursaccording to data from Coinglass.
Most of the liquidations, or just over $264 million, are long positions or higher price bets, and more than 100,000 traders have been liquidated. Traders in Bitcoin alone faced liquidations worth USD $93 million in the same time period, according to the data source.
Liquidations occur when a service provider forcibly closes a trader’s leveraged position due to a margin deficit. In other words, traders’ positions are liquidated when they lack sufficient funds to keep the trade open, and it occurs when market movements go against the trader’s bet.
Several factors add downward pressure to the market
A number of factors have added downward pressure on the cryptocurrency market, including the much-anticipated payouts to victims of the now-defunct exchange Mt. Gox This month, the alleged sales of Bitcoin by the German government and economic uncertainty in the US regarding inflation and the upcoming rate cut.
The downward trend has been replicated in exchange-traded funds (ETFs) of Bitcoin US cash market funds, which posted losses for a second straight session on Wednesday. The 11 funds saw daily outflows of $20.5 million, following an outflow of nearly $14 million on Tuesday, according to data from the fund’s website. Farside Investors.
Analysts expect volatility to continue over the next few weeks as Mt. Gox distributes money to its creditors and monthly economic readings are released in the United States.
“In the coming week, I expect bitcoin to continue to experience volatility as the market digests the Mt. Gox payments and responds to broader economic signals.”, commented Rachael Lucas, a crypto analyst at the exchange BTC Markets from Australia, as cited The Block.
Despite this, there are those who are still optimistic for the second half of the year. Analysts at Standard Chartered said this week that Bitcoin could hit a new price record by August amid the US election backdrop.
At the time of editing, Bitcoin It is around USD $57,200 with a loss of 4% in the last 24 hours and 6.6% in the week. It is 21% below the all-time high of over $73,000 seen in March, though still up 84% on the year, according to data from CoinMarketCap.
Article by Hannah Estefanía Pérez / Bitcoin Diary
Picture of Unsplash
WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be appropriate for retail investors, as the total amount invested could be lost. Check the laws of your country before investing.
