Bitcoin’s Touches $60,000, Triggers Thousands of Liquidation on Different Exchanges
Bitcoin (BTC) saw substantial volatility when it approached the $60,000 threshold, setting off a series of liquidations that cost traders hundreds of millions of dollars. The price shift caused tremors in the cryptocurrency market, intensifying the sell-off and resulting in large losses for traders using leverage.
Investors and traders alike had been looking forward to the rise towards the $60,000 level, with many speculating about a possible breakthrough to new all-time highs. But when Bitcoin got closer to this crucial resistance level, selling pressure increased, and the price fell sharply, leaving most traders to count their losses.
The withdrawals from bitcoin exchange-traded funds (ETFs), which intensified the sell-off, were one of the factors that contributed to the decrease. Grayscale Bitcoin Trust (GBTC) saw notable withdrawals totalling $444 million. This large-scale withdrawal from GBTC aggravated the market’s pessimism among holders and raised pressure to sell Bitcoin and other cryptocurrencies.
Bitcoin Stabilizes at $62,000 Before Moving to $63,501.94
Apart from the withdrawal of ETFs, the market experienced a sharp increase in liquidations due to margin calls for leveraged traders amidst the sharp decrease in prices. Explaining the role of leverage in the situation, Charles Thuo, an analyst with Invezz, explained that trading using leverage increases a trader’s potential profit but exposes them to large losses should the market turn against their holdings.
He added that leveraged traders were compelled to sell their holdings when the price of Bitcoin crashed in order to meet their margin requirements, which furthered the decline in prices. The price of BTC in the last 24 hours had dipped to $60,807.79 before stabilizing, pushing farther towards the $62,000 support position.
At press time, BTC was trading at $63,169.20 after a decline of 1.13% in the last 24 hours, reflecting increased selling pressure in the market. There are indications that the BTC is trying to maintain its price above the $63,000 price mark, an activity that is in line with the major outflows in the BTC Exchange-Traded Funds (ETFs), thereby further dragging down its price.
Pro-Bitcoin Proponents Say BTC Corrections Are Necessary, Analysts Remained Confident
Proponents of Bitcoin contend that market corrections are essential to the platform’s healthy long-term growth and are a normal element of its price discovery process. Many analysts are still confident about Bitcoin’s long-term prospects amid dense short-term prospects.
They point to the cryptocurrency’s solid fundamentals and increasing institutional acceptance as justifications for their optimism. However, the number of affected traders has continued to increase, accounting for more losses in 24 hours. There’s currently $560.58 million recorded liquidation linked to 142,526 traders (and still counting).
The prominent cryptocurrency analyst, Captain Faibik, has recently warned of a “Rising Wedge Downside Breakout,” where he suggested a possible $60,000 drop in the value of BTC, before the expected Halving coming in April.
Binance and OKX Exchanges Record the Most Liquidation, Altcoins Affected
The report has it that the biggest single liquidation happened on the OKX exchange, with a trader liquidating $12.25 million that occurred during a BTC-USDT-SWAP transaction. The BTC accounted for the biggest liquidated assets, with a cumulative sum of $211.15 million.
Ethereum and Solana made it to the second list of the assets with the biggest liquidations within the week, with Ethereum getting $144.24 million and Solana $42.27 million in total liquidation. Other major altcoins like the Dogecoin, and Binance Coin were also grossly affected by the liquidation.
The rest of the liquidation records spread across many different cryptocurrencies, thus, reflecting the equivalent effect of the market’s downward trend. Accounting for the list of exchanges that had the most liquidation, Binance topped the list with $40.20 million, followed by OKX with a little over $32.19 million.
The affected exchanges were compelled to shut down their leveraged positions, as many traders were beginning to fail to meet the required margin, which resulted in partial or absolute loss in their previous margin.
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