Bitcoin lost about $3K of its dollar value within 60 minutes after experiencing a sudden crash during the European morning trading session. Crypto analysts are suggesting that this liquidation might pave the path for a BTC rally in the coming month.
The Altcoins Were Not Left Out of This Liquidation
Like it always happens, this situation led to ripples of liquidations across the whole crypto market and as of this writing, more than $599.9 million worth of leveraged positions have been lost.
Hence, the accumulated loss in the crypto market has exceeded one billion dollars in less than 24 hours. This recorded loss was on both short and long trading positions. However, about 94% of the $600 million lost was on long trading positions, and more than 50% of the loss was on bitcoin alone. This new wave is smaller when compared with the series of liquidations that occurred within 24 hours earlier this month.
On that occasion, liquidation happened on more than 200K positions, this time the liquidation has happened on a little less than 157K accounts.
Binance took the biggest hit, and that shouldn’t be a surprise since Binance futures is acclaimed to be the global leader in derivatives exchange as determined by end-users and volume. Huobi experienced the biggest single liquidation order. That order was a BTC order, and it was worth about $13.9 million. These ruffle effects happened because bitcoin experienced a sudden crash. As depicted by this BTC/USD chart from tradingview (see below), the king coin lost almost $3k in less than 30 minutes.
BTC/USD chart. Source: tradingview
BTC Is On a Gradual Uptrend
This BTC crash occurred just as it was about to attain the highly desired $60,000 price. Sadly, the king coin retracted in price to trade around the $56,500 mark as of this moment. Fortunately, the foremost cryptocurrency recouped some losses after some quick dip-buying. Thus, it now trades within the $58.5K price range.
As BTC experienced this price retracement, all the altcoins also experienced price declines in various proportions. With this new development, there have been several reactions on the bird app. Some pro traders are already suggesting that newbies should exit all their leveraged trades and if they are yet to enter one, they shouldn’t. They suggest a focus on spot and compounding.
Leveraged trades mean using borrowed funds to trade a larger position than is allowed with your funds to earn much larger profits. This margin can be positive and negative; it is positive when it amplifies the traders’ returns, and it’s negative when it leads to more liquidations and losses.
As crypto traders must have observed, there have been lots of long liquidations this year. Some traders will feel that they’ll need to use leverage in their trades especially as BTC and some other altcoins are surpassing their previous peak prices. Despite being on a 3% downtrend within 60 minutes, the leading crypto asset has been on a cumulative 6% uptrend for the week so far.