The largest cryptocurrency in the world has fallen below a critical price level and has carried away the rest of the crypto market.
How low can BTC fall now?
Bitcoin, the world’s largest cryptocurrency by market capitalization, fell below the $ 45,000 mark this morning. This has led to a market-wide price slaughter.
Data also shows that over $ 328 million worth of crypto positions were “liquidated” this morning. This affected over 87,000 individual trading accounts. At the moment (editorial deadline), however, the market seems to be stabilizing temporarily. In other words: The second sudden drop in prices on the crypto market within a few weeks has apparently stopped.
Bitcoin: what triggered the decline?
For the uninitiated: “Liquidations” occur when stock exchanges / brokers automatically close leveraged positions as a “safety mechanism”. Futures and margin traders who borrow capital from exchanges (usually multiples of that) to make larger bets, deposit a small amount as collateral before entering a trade.
In traders’ lingo, “longs” are used when investors bet on the rising price of a particular asset. “Shorts”, on the other hand, arise when you bet against that asset.
Bitcoin long positions were largely liquidated this morning, as data from the Bybt analysis tool shows. Accordingly, Bitcoin futures positions worth $ 93 million were liquidated, with $ 62 million (65% of all trades) being long positions.
The overall trend also seems to have shifted slightly. As the image below shows, Bitcoin has broken below its $ 46,800 support and has hit its current $ 44,200 support level. BTC has lost 13% of its value in the last week alone. The next support is now at $ 40,000 – if the price should drop further.
For most other cryptocurrencies, the situation is not looking much better at the moment. In Ethereum, for example, there were liquidations worth over $ 47 million in ETH long positions, which totaled $ 70 million. Solana, Cardano, Polkadot and Ripples XRP followed ETH with liquidations worth $ 26 million, $ 22 million, $ 12 million and $ 10 million, respectively.
Bybit accounted for the majority of all liquidations with $ 103 million, followed by Binance with $ 97 million, OKEx with $ 69 million and FTX with $ 49 million.
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