Bitcoin’s Price Drops After Long Liquidations
Bitcoin’s recent peak at $108,200 was short-lived as its price quickly dropped by over 12% to $95,000 in less than a week.
Long Liquidations Cause Selling Pressure
- Between Dec. 17 and Dec. 22, over $540 million in long positions were liquidated.
- Dec. 19 saw the largest single day for liquidations with approximately $214 million in longs wiped out.
Impact of Overleveraged Trading
- Forced liquidations of high-leverage long positions added to selling pressure.
- Bitcoin’s decline below $100,000 accelerated by liquidation cascade.
Short Liquidations During Price Spike
- Approximately $120 million in short positions were liquidated on Dec. 16 as Bitcoin surged.
- Rapid price increase led to short squeeze and upward pressure on price.
Role of Leverage in Market Movements
- Long liquidations far exceeded short liquidations, reflecting a shift in market sentiment.
- Short liquidations peaked during rally while long liquidations intensified during sell-off.
Overall, Bitcoin’s recent rally and subsequent drop were heavily influenced by leveraged positions, showcasing the impact of liquidations in shaping price movements in the cryptocurrency market.
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