$5.64 billion liquidated in 24 hours as Bitcoin extends losses — Is a relief rally near?
The price of Bitcoin (BTC) dropped by more than 17% in the last 24 hours as the futures market saw mass liquidations across the board.Liquidations happen when leveraged futures positions fall to a specific threshold. What set off the mass Bitcoin liquidation fest?If the Bitcoin futures market is highly overleveraged and overcrowded, a minor rate movement can activate mass liquidations.According to experts at Santiment, an information analytics company, an address was responsible for the second-largest Bitcoin transaction of the year, as Cointelegraph reported.More than 2,700 BTC were transferred right prior to the drop, which were larger than the 2,000 BTC inflow seen before the March 2020 crash when Bitcoin dropped listed below $4,000. Source: BybtIt is a possibility that a major sell-off in the area market triggered the futures market to see intense selling pressure from numerous long positions getting liquidated.When Bitcoin at first began to fix on Feb. 22, the futures funding rate of the dominant cryptocurrency was hovering at around 0.15% even as it continued to drop.This trend showed two things: overleveraged buyers were strongly purchasing each dip and the market remained overheated even as the pullback happened.As an outcome, brand-new buyers throughout the short-term drop were constantly liquidated, firing up a ruthless cycle of cascading liquidations.However, a pseudonymous trader known as “Byzantine General” described it as a “coordinated shakeout,” and stated it is a healthy trend.Bitcoin price chart with orderbook suite.
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