Bitcoin, the largest cryptocurrency by market capitalization, has experienced a dramatic decline. The price of Bitcoin has fallen to $ 27,200 in the past hours. So, what lies behind the depreciation of the leading cryptocurrency? Here are the details of BTC’s price action and what happened…
Bitcoin ‘dramatically’ crashed
Bitcoin suffered a dramatic collapse, falling to its intraday low of $27,242 on the Bitstamp exchange. The drop came after BTC rallied as a result of the sharp drop in First Republic Bank shares. The drop in First Republic Bank shares triggered the escalating banking crisis. After the drop in the share price, the cryptocurrency briefly regained the $30,000 level earlier today. However, you can see the sharp drop to $27,200 right after that in the chart below:
This downturn wiped out the crypto asset’s recent gains. According to data from CoinGlass, liquidations in the last hour totaled $183.29 million. Long positions came to the fore with a liquidation of $161.21 million. This corresponds to 87 percent of the total liquidation rate. On the other hand, short positions faced a $22.07 million liquidation.
As we have also reported as Kriptokoin.com, long positions are bets for higher prices, and short positions are bets for lower prices. Liquidation occurs when an exchange forcibly closes an investor’s leveraged position due to partial or complete loss of the investor’s initial margin. This happens when an investor does not have enough funds to keep the trade open. Large liquidations can mark the local top or bottom of a steep price action, allowing investors to position themselves accordingly.
Behind the decline in BTC Mt. Got gox?
Among major exchanges, Binance saw $62.63 million in liquidation, of which 92.44 percent were long positions. On the other hand, OKX experienced a liquidation of $ 54.13 million, 88.15 percent of which was long positions. The drop in Bitcoin’s value has caused Arkham to hit both Mt. Gox and coincided with a warning that US government wallets were trading. The warning got a lot of attention on Twitter and speculation was gone. It should be noted that the link between these transactions and the Bitcoin crash is still unclear. But the timing points to a possible correlation.
Arkham said he does not believe his warnings caused the market panic. Because he pointed out that he sent this warning to a “small part” of users. Bitcoin has since rebounded yesterday’s losses. It regained $29,000 in the morning hours on Thursday. According to data from Coinglass, around $200 million in open interest has been added.
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