Yesterday, traders took a hard blow: the decline of Bitcoin (BTC) under $ 43,000 resulted in $ 3.54 billion in liquidations.
“The settlement amount in the last 24 hours amounts to a total of $ 3.54 billion!
In the past 24 hours, 330,243 traders have been liquidated. The largest single liquidation order took place on @HuobiGlobal, valued at $ 43.7 million. “
Amount of Liquidations in the past 24 hours by exchanges in total $3.54 was liquidated!
In the past 24 hours, 330,243 traders were liquidated. The largest single liquidation order happened on @HuobiGlobal #BTC $ BTC value $43.7M
Data source: @bybt_com pic.twitter.com/hNgctWgCgP
— CryptoDiffer (@CryptoDiffer) September 7, 2021
During the Labor Day holiday weekend in the US, bullish sentiment was on the rise ahead of Bitcoin’s official recognition as legal tender in El Salvador: but the celebrations were quickly dampened by a sudden drop in the price of the asset.
The data says Cointelegraph Markets Pro e TradingView show that the sell-off pushed Bitcoin’s price to a low of $ 42,837, then attracting buyers who reported the price to around $ 46,500.
Here’s what traders are saying about this unexpected downside, and what to watch as the market attempts to digest last day’s chaos.
Long positions heavily liquidated after BTC crash
Below, an analysis focused on the current state of the market offered by analyst Willy Woo, published in the following tweet of 7 September:
“Open day with risk-off in shares.
Some BTC sales.
Average levels of fundamental inflows (selling).
Stop hunt / liquidity collapse follows.
$ 1.1 billion in BTC liquidations.
Movement overall not supported by the fundamentals of on-chain investors.
Exchanges are now experiencing outflows (buying). “
Day opened with equities risk-off.
Some sell down of BTC.
Medium levels of fundamental inflows (selling).
Then stop hunt / liquidity collapse.
$1.1b of BTC liquidations.
Overall unsupported by investor fundamentals on-chain.
Exchanges are now in outflows (buying)
— Willy Woo (@woonomic) September 7, 2021
As highlighted by Woo, broader financial markets started the day with a risk-off, putting pressure on the cryptocurrency market which cascaded as the day progressed.
The resulting sell-off led to $ 1.1 billion in Bitcoin liquidations, but on-chain data does not suggest that investors are in a rush to close their positions and the most recent activity shows that exchanges are again experiencing outflows.
A later tweet, Woo shows just how unexpected the September 7 movement was, a good reminder that risk management is always something to keep in mind in the cryptocurrency market:
“I’m not entirely sure what the fuck just happened, but this is the sequence of events. The sell-off occurred mainly in derivatives markets (like most crashes). “
Possible abnormal value detected
Further analysis of Bitcoin’s September 7 movements was provided by Michaël van de Poppe, market analyst and Cointelegraph contributor, highlighting the role played by traders with excessive leverage:
#Bitcoin lost the $ 49,000 level as a crucial support, it just broke through.
What just happened?
Overexposed positions are liquidated in a chain reaction, causing a huge wick (or shadow).
If this wick closes above $ 47 / 48,000, it would have been a mere outlier.
Possible opportunity.
#Bitcoin lost that $49K level as crucial support and smacked through it.
What just happened?
Overleveraged positions getting liquidated in a chain reaction, causing a massive wick.
If this wick closes above $47/48K, it will be an outlier.
Opportunities.
— Michaël van de Poppe (@CryptoMichNL) September 7, 2021
According to van de Poppe, if BTC manages to close above the $ 47,000 – $ 48,000 range following this pullback, the move will be considered an anomaly with respect to the previously established trend and a good buying opportunity in the event of a recovery. of the uptrend.
Related: El Salvador took advantage of Bitcoin’s dip to buy, the president confirms on Twitter
Not all traders were caught off guard
Not all market participants were caught off guard by the September 7 crash, as highlighted in the following tweet posted by the analyst and Twitter user Crypto_Ed_NL:
“Do you feel lucky you didn’t get liquidated in that corrective movement today? Wait and change your underwear … it might not be over yet!”
Feeling lucky you did not get liquidated in that corrective move earlier today?
Wait with getting new, dry pants…might not be over yet! pic.twitter.com/DIp9USNfK7— Crypto_Ed_NL (@Crypto_Ed_NL) September 7, 2021
A subsequent tweet includes the following graph, showing a movement that has since become evident:
Crypto_Ed_NL ha declared:
“BTC has reached the green box. Let’s see how it bounces … .. in my opinion, the correction should be exhausted. “
The overall market capitalization of cryptocurrencies is $ 2,103 billion, while Bitcoin’s dominance rate is 42.1%.
The views expressed herein are solely those of the author and do not necessarily reflect the ideas of Cointelegraph.com. Every trade carries risks, you should conduct your research before making a decision.
Risk Disclosure: The articles and articles on Arover.net do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies.
