Bitcoin hit local lows around $ 45,000 today, resuming its downside movement after falling and then partially recovering on Monday.
The result of these movements was the liquidation of $ 5.77 billion in the cryptocurrency market as a whole and $ 2.5 billion in bitcoin. This is the largest volume of liquidations in one day in the cryptocurrency market, according to available statistics.
Open interest or the volume of active positions in bitcoin futures in 24 hours decreased by 15% to $ 12 billion, and in the market for most altcoins, the indicator decreased by 25-40%.
After a long period of significantly inflated values, indicating an overabundance of high-margin long positions, the futures funding rates returned to normal. On Binance, for bitcoin, the indicator dropped to neutral 0.01%, and for some altcoins it even went into the negative zone.
Traders tend to use large amounts of borrowed money to open long positions when they expect the rally to continue and thus hope to earn more. However, when the price drops enough, the collateral they provide is insufficient to secure the margin positions and they are liquidated by the exchanges. Over the past 24 hours, almost 650,000 traders have been liquidated, and the largest of them occurred on the bitcoin market of the Huobi exchange – its volume was $ 20.66 million.
Crypto market capitalization in two days dropped from $ 1.76 trillion to $ 1.38 trillion, bitcoin capitalization – to $ 900 billion, after it recently rose above $ 1 trillion for the first time. Trading volumes in 24 hours rose more than 60% to $ 264 billion.
Bitcoin experienced a 30% pullback last month, and has lost about 23% of its value in recent days from the peak.
“Approaching the rebound area. Resistance at $ 48,500 and $ 51,000, ”analyst Michael van de Poppe writes.
Approaching bounce region for #Bitcoin…
I think we’re close now.
Resistance zone at $ 48,500 and $ 51,000. pic.twitter.com/ctsLwLpVFD
– Michaël van de Poppe (@CryptoMichNL) February 23, 2021
“As we noted yesterday, there was an eleven-fold increase in bitcoin inflows to exchanges, triggering a correction from an all-time high of $ 58,300,” analyst firm Santiment said. “The data shows that the address behind the second largest BTC transaction this year transferred 2,700 BTC to an exchange wallet ahead of the sale.”
As we noted yesterday, there was an 11x exchange inflow spike that initiated #Bitcoin‘s price correction from its $ 58.3k #ATH… Further data combing revealed that an address was responsible for the 2nd largest $ BTC transaction of the year, an import of 2,700 tokens to the wallet pic.twitter.com/CTgtJr27np
– Santiment (@santimentfeed) February 23, 2021
According to Santiment’s observations, the same address was transferring cryptocurrency for an expected sale in March 2020 before the markets crashed.
“We are not claiming that one address causes a pullback in the price of the largest cryptocurrency asset in the world. But has the activity of this address become an influencing factor? Yes, ”analysts explain.
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