More BTC traders are recording significant losses in the intra trading market due to high volatility spikes and market correction amid the sell-off. Over $640 million worth of the flagship currency was liquidated over 24 hours.
The liquidation was not surprising, given that BTC’s price has been fluctuating over the past few weeks. After it plunged to a low of $54k, BTC bulls started experiencing a major spike in liquidation.
BTC Daily Loss Still Sits At 10%
Although the flagship crypto has been back up by almost $700, the daily loss is still around 10%. Liquidation over the last few hours is now $102M.
Typically, large liquidations volume means that the market was previously overbought, like in the case when BTC was overbought in early October. When Bitcoin retraced by over 50% in May this year, traders witnessed the same level of liquidation.
Presently, the buying power is low on exchanges, as traders still expect the flagship crypto to decline further. The fear and greed index, a sentiment indicator, shows that many crypto traders are now living in fear.
With reports showing the spread of the deadly Delta variant, many countries will be on high alert. This means they would implement restrictions to prevent further deaths and the spread.
Already, the stock market is responding negatively to the news of the spread. This is similar to what occurred at the end of 2019, when it fell by almost 30% due to the outbreak of the Coronavirus.
BTC is showing similar correlation. Crypto markets are known to follow the stock market by losing value, especially when caused by a world problem like the pandemic. This means that BTC price could fall even further, as fears have already been cast in the crypto market.
Ethereum Recovers After Falling Sharply
The second largest crypto was also affected by the pressure on the crypto market. Like Bitcoin, Ethereum also recovered slightly after shedding a portion of its value, falling below $4k.
This was the first time since mid-October that the crypto traded before the strong support level. Though the cryptocurrency has recovered, market analysts are still not convinced that the asset will hold on to that support for long, given the situation of the market.
Data from multiple exchanges reveal that over $60M worth of Ether was liquidated in the past few hours. The data also reveals that many overbought orders for ETH have been gathered around the $4k support.
This wasn’t the first time that ETH tested the area close to $4k. However, on multiple occasions, it failed to trade above it. As at the time of this publication, ETH is trading slightly above the lower support level of $4k.