After hitting new all-time highs, a sharp market correction and a US$930 million “liquidity flush” has knocked bitcoin back to US$58,000, according to data from analytics firm Bybt.
Due to a price drop in “digital gold” and the overall crypto market in the past 24 hours, a series of liquidations was triggered across exchanges as traders were unable to meet margin requirements in their leveraged positions.
The total value of liquidations reached more than US$930 million, with 87,135 traders liquidated. The largest single liquidation order happened on Bitmex-ADA, with a value of US$3.85 million.
Recent History Repeats
Crypto analyst and investor Justin Bennett took to Twitter to explain to his followers that despite the dip, bitcoin seems to be primed to follow the same pattern as it did in September:
Bennett went on to say that he believes the worst is probably over for the altcoin market, and even if bitcoin sees further price drops, altcoins will likely not be greatly affected. At the time of writing, the price of bitcoin was sitting at US$61,165 according to data from CoinGecko.
Bitcoin Dump or Short-Term Flushout?
Although bitcoin’s price is trending down amid signs of excess leverage and greed in the market, many are wondering whether this is it, or is it just the beginning of a more extensive correction needed to liquidate the high leverage recently exercised by retail investors?
All signs seem to point to the correction being short-lived, with bitcoin having stabilised. If all goes well, we should see a recovery take place, but only once leveraged investors have been flushed out.
William Clemente, lead insights analyst at Blockware Solutions, took to Twitter to share his view:
Just Buy the Dip!
The first US-based Bitcoin exchange-traded fund (ETF) has been greeted with mixed emotions. All things aside, this is certainly a massive move in the right direction for Bitcoin and crypto adoption.
Overall, the picture for the bitcoin price is bullish. Over the past five months, about 70 percent of the total supply of bitcoin has not moved, indicating that the majority is held by long-term holders or HODLers.
The market has also seen traces of whales, with Bitcoin addresses with 100 to 1,000 BTC accumulating over 85,700 BTC in a two-week period. Along with an increased demand for bitcoin, a supply squeeze is being created that looks bullish in the long term.
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