Global Correction Of Crypto Market Continues With The Liquidation Of $520m BTC Longs
There is still no end in sight in the ongoing digital asset market correction. More traders continue to liquidate their trade positions and exit the market. Consequently, there is a sharp rise in liquidation volumes on most exchanges, especially in the past 24 hours.
BTC Price Still Slipping
As BTC price slipped further down, the total liquidation volume across all exchanges is estimated to be about $650m. BTC has lost about 9% in value in the past 24 hours. An important takeaway from this liquidation volume is that the previous bullish run mainly depended on several overleveraged trades.
Overleveraged trades mean traders have maximized the amount of funds they can borrow from exchanges to profit from their trades. However, high leveraged trades also have their benefits particularly, low liquidity. Based on the events of six months ago, traders should have seen the consequences of overleveraged trades—that time, the leading cryptocurrency set a new peak price before retracing by about 50%.
This event might explain why most exchanges have limited the leverages available to traders. As of this writing, no exchange is offering the x100 leverage option, which was quite popular four years ago and almost became the norm among all exchanges back then. Most of them now allow leverage options similar to what’s obtainable with traditional brokerages.
The benefit of this reduction in available leverage is that it helps these exchanges adhere to safe trading practices. Most apex banks and government financial watchdogs have often scrutinized crypto trading because of these overleveraged options, including several manipulations going on in the market.
A New 4-Week Low For BTC
Traders took profits after BTC reached a new peak price of $69k about a week ago. A few minutes after hitting that peak price, it dipped by $6k and didn’t recover to the peak price since then. This week BTC managed to rise to $66k, but it couldn’t sustain that price; it lost $7k 24 hours later.
Hence, it slipped below $60k for the first time in three weeks. BTC continues to make failed attempts in surging past the $60k price. Instead, it dipped again to about $56k (based on BitStamp data). Thus, becoming its lowest price since the middle of last month. However, BTC has made some slight gains and now trades at $57k as of this writing. Despite these slight improvements, its market dominance isn’t back up to 45% yet, and its market cap is still a little over $1 tr.
Altcoins Are Also Suffering
As is always the case, most altcoins follow BTC’s path and are experiencing price dips too. All the top 10 digital assets are in the red. Only two large-cap altcoins ($luna and $avax) made slight gains in the period under review.
Decentraland (mana) made the most appreciable gains among the mid and low-cap altcoins, gaining 12% during this time. CoinGecko data revealed that the overall evaluation of the digital asset market now stands at $2.65TR, which is a $450n decrease from its ATH seven days ago.
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