Bitcoin’s Sharp Drop Triggers $1.7 Billion Total Crypto Liquidations
Liquidations totaled more than $1.7 billion as Bitcoin (BTC) prices fell to an intraday low of $94,150 on Monday. The appetite for profit-taking continued into Tuesday, with Bitcoin still trading below the $97,000 mark at the time of writing.
At the same time, the cryptocurrency market is heading for a crazy week, with several important economic events taking place in the United States.
Cryptocurrency liquidations total more than $1.7 billion
According to data from Coinglass, 583,530 traders were exposed in the past 24 hours. Subsequent liquidations totaled more than $1.7 billion. Of this, at least $1.552 billion is in long positions, while $154.59 million is in short positions.
A massive liquidation ensued Bitcoin’s recent correction. Herald cryptocurrency drops to intraday low $94,150 Binance Exchangee.
While the unwindings shocked traders and investors, the market was equally optimistic and skeptical. Still, Unipcs, a popular user on X, urged caution.
“…(This marks) the largest long liquidation event of 2021. Massive liquidations like this almost always mark a bottom. Now is not the time for panic selling. Now is not the time to be too greedy or hastily add leverage . Now might be a good time to start playing high-conviction games on the field in preparation for the next positive upward move,” the user explain.
Indeed, caution is warranted given the expected impact of this week’s release of U.S. economic data. AsBeInCrypto reportUS Consumer Price Index (CPI), weekly employment data and Producer Price Index (PPI) may influence Bitcoin sentiment this week. These U.S. macroeconomic data will shed light on the state or health of the U.S. economy.
However, for some, the massive liquidation provided a “healthy flush” that eliminated funding rates for all altcoins. This means that a large number of leveraged positions were forced to be liquidated due to the sharp market decline.
“All altcoin funding rates have been cleared. It’s a healthy flush,” crypto analyst Seth, joke.
this funding rate It is a mechanism for exchanges to ensure permanence futures The market price remains consistent with the spot market price. The liquidation of many leveraged positions could lead to extreme situations volatility and price dislocations in the market. In many cases, this results in funding rates resetting back to neutral levels.
Analysts believe such events help rid the market of excessive leverage, speculative positions and weak hands. This paves the way for healthier and more sustainable price movements in the future. By clearing out overleveraged positions, the market has the potential to find a more stable basis for growth without the burden of excessive speculation driving prices.
BeInCrypto data programme As of this writing, BTC is trading at $96,682, down nearly 3% since Tuesday’s open.
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