After hitting another high over the weekend, Bitcoin “lost height” and dropped to $ 54,600 due to liquidations of more than $ 2 billion in margin positions.
On the rebound that followed, BTC returned to $ 56,000. Approximately $ 2.2 billion in margin positions have been closed in the last 24 hours, according to Bybt. This means that cryptocurrency exchanges have liquidated the positions of traders with excess leverage. When the bitcoin price falls below the liquidation price of positions, trading floors are forced to close them because traders cannot meet the margin requirements.
Over the past 24 hours, positions of more than 195,000 traders have been closed. Binance has the largest share of closings (about $ 435 million), followed by Bybit ($ 328 million) and Huobi ($ 192 million). The correction began after Bitcoin’s recent attempt to break through the $ 62,000 mark.
CryptoQuant CEO Ki Young Ju believes that the first cryptocurrency’s unsuccessful attempt to gain a foothold at $ 60,000 and the subsequent pullback is due to a zero or negative premium on the Coinbase exchange, which is the main indicator of demand among institutional investors.
A positive spread means increased demand from institutions as they prefer to trade through regulated platforms using over-the-counter cryptocurrency (OTC) trading. Joo suggested that Bitcoin will continue to be bearish until institutional investors start pouring significant capital into Coinbase again.
According to cryptocurrency analyst Lark Davis, whales storing more than 1,000 BTC in their addresses began to withdraw cryptocurrency. However, this does not mean the end of the bull run. Davis called it just profit-taking. Patrick Heusser, head of trading at Swiss firm Crypto Finance AG, also believes this Bitcoin rollback is normal. The breakout beyond $ 60,000 was triggered by the actions of margin traders. The perpetual futures rate and futures premium were overstretched, Heusser said.
LMAX Digital strategist Joel Kruger believes that the depreciation of bitcoin was influenced by media reports about the introduction of criminal liability for the use of cryptocurrencies in India. Bitcoin is expected to sag further in the short term if US bond yields continue to rise, as this destabilizes stock markets.
Nevertheless, analysts of the CrossTower platform are more optimistic. They assume that large organizations will keep the bitcoin rate above $ 50,000.