According to CoinGlass data, the cryptocurrency market experienced a significant decline on November 14. The value of Bitcoin (BTC) dropped rapidly from $36,600 to below $35,000, marking one of the biggest sell-offs since August. This unexpected decline follows surprising US Consumer Price Index (CPI) numbers that remained unchanged, contrary to economists’ predictions of a 0.1% increase. Interestingly, Bitcoin initially rose about 1% within minutes of the announcement. Here are the details…
CPI had a positive impact on Bitcoin price
RSM Chief Economist Joseph Brusuelas interpreted the unchanged CPI figures as positive news and emphasized that prices of core goods decreased by 0.2% in October. He expressed optimism that inflation will cool further, especially as housing costs are expected to decrease by mid-24. However, contrary to expectations, Bitcoin suddenly reversed its gains, falling 4% to around $35,000, plunging the entire market into a sea of red. Ethereum, the second largest cryptocurrency, also experienced a 6% decline, falling below $2,000.
The intense fluctuations in Bitcoin on the evening of November 14 led to the liquidation of over $307 million long positions in the last 24 hours, causing the largest sales wave since August 17. This significant liquidation volume points to a potential oversight by many investors who may have overlooked caution when Bitcoin initially reacted positively to US CPI data, only to reverse sharply.
Millions of dollars of positions were liquidated
According to CoinGlass data, 88,667 traders were affected by this situation, while Bitcoin traders lost 133 million dollars and ETH traders lost approximately 70 million dollars. The meltdown of leveraged long positions is the biggest loss in three months, reminiscent of the sharp decline in August when Bitcoin plummeted from $28,000 to around $25,000 in minutes. JPMorgan analysts have previously noted that there is over-optimism within the cryptocurrency community regarding Bitcoin spot ETFs. Although similar ETFs exist in Canada and Europe, they have received “insignificant interest from investors,” according to JPMorgan.
This latest pullback contrasts with the short squeezes witnessed over the past few weeks as rising asset prices forced the liquidation of money-losing leveraged positions in pursuit of lower prices. The large number of liquidations indicates that the sudden decline caught most investors off guard and highlights the inherent volatility of the cryptocurrency market. As we reported as Kriptokoin.com, JPMorgan analysts warned in a report published last week that the recent rally in cryptocurrency prices may have been “overdone”. He warned against overly optimistic expectations regarding the impact of spot BTC exchange-traded fund approvals on asset prices.
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