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Saturday, November 27, 2021

High leverage on BTC provokes closing of deals for $ 500 million

The latest bitcoin correction triggered a record close. In total, transactions worth $ 500 million were liquidated within 60 minutes. Moreover, many of them were opened using high leverage on BTC. As a result, they were forcibly liquidated due to lack of margin. This is a rather commonplace situation for the cryptocurrency market, where high volatility requires that trades with high leverage be opened with extreme caution.

On March 15, Bitcoin markets vehemently rejected the $ 60,000 price range, and excessive leverage resulted in record long liquidations of $ 500 million in just 60 minutes.

Glassnode founders Jan & Yann highlighted a new record for hourly Bitcoin for liquidations, noting that more than half of open futures contracts were raised at least 20x before margin calls.

What does high leverage on BTC lead to?

Bybt’s data show the following. $ 800 Million Liquidation Transactions Processed in Just 15 Minutes

Datamish Crypto Market Data Aggregator provided the following information:

  • over the past 24 hours, 292 positions worth $ 94.5 million were liquidated on the BitMEX exchange;
  • Bitfinex closed 488 positions for about $ 100 million over the same period.

The second largest one-day liquidation occurred on February 22, when BTC fell from its then-all-time high of $ 58,300 to around $ 47,000. As reported by Cointelegraph, $ 5.9 billion worth of futures contracts were closed during the crash.

Since its peak on March 14 at $ 61,000, Bitcoin has corrected 12.3% to $ 53,500 during Asian trading on Tuesday March 16. BTC has made a slight recovery since then, last changing hands for $ 54,600 at the time of this writing.

This latest retracement is the third major retracement of the current bullish cycle.

What’s next?

Curiously, bitcoin’s fear and greed index indicated. The markets were in a state of “extreme greed” last week. Now the correction has led to the fact that the indicator has returned to the category of “greed” with a rank of 71. Well, this indicates a significant cooling of market sentiment.

Experts disagree now. But those who are usually right predict that BTC will make another attempt to climb up. Now an extremely important level is 68 thousand and beyond 75 thousand. If the coin manages to reach them, then a false breakout and a long deep correction will probably follow.

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