Bitcoin Dip Causes $6.5 Billion in Liquidations as Analysts Consider Local Top

Bitcoin Dip Causes $6.5 Billion in Liquidations as Analysts Consider Local Top

February 23, 2021

Key Takeaways

  • Bitcoin price crashed below $50,000 this morning, causing the crypto market to lose $200 billion in total market capitalization.
  • The crash from Bitcoin and Ethereum’s peak on Saturday has seen $6.5 billion in liquidations across crypto markets.
  • Technical and on-chain indicators points towards a local top in Bitcoin.

Bitcoin’s roller-coaster ride took a downturn Monday as BTC dropped 18% to lows of $46,700 on Coinbase, causing rampant liquidations across derivatives markets.

The Bitcoin Top Debate

An $11,000 massive correction drove Bitcoin below $46,700 on Coinbase.

Between 9 and 10 am this morning, $2.37 billion margin positions got liquidated throughout the crypto markets. The total liquidation in the last 24-hours amount is $4 billion, and the crypto market has recorded over $6.5 billion in liquidations since an all-time high of $57,000 reached on Saturday.

The bottom was different across crypto exchanges. European exchange Bitstamp crashed during the drop, and the last recorded low on the exchange is $47,400.

On Bitmex, the low was $47,500 as well, while Kraken revealed a significant lack of liquidity with a drop to $45,000 BTC. 

U.S. Treasury Secretary’s comment acted as the perfect catalyst for the sudden plunge. Yellen deemed Bitcoin inefficient and raised illicit financing concerns yet again. 

On Tuesday, Bitcoin broke above $50,000 for the first time and hit an ATH on Saturday. Ethereum also broke above $2,000 for the first time on Feb. 20. 

A comparatively smaller drop late on Saturday caused $2.5 billion in liquidations. Bitcoin touched lows of $54,000 that day, while ETH to $1810.

Quick recovery to opening prices may indicate that buyers quickly bought the dip, but the price action is also a textbook top indicator. 

Last Chance to Sell Bitcoin? 

The price charts of all cryptocurrencies, especially altcoins, paints a painful picture for traders. The drastic drop hunted crypto long-orders and caused liquidations worth $2.37 billion.

The wick or shadow marks the top and bottom in the stipulated time period, representing the price fluctuations relative to its opening and closing price. 

A longer wick indicates a large fluctuation in the asset price. This morning most cryptocurrencies painted a classic “hanging man.” A hanging man candlestick in an uptrend represents heavy selling, which may mark the asset’s local top. 

The dormancy flow metric, which measures the flow of ‘HODLer’ tokens relative to the on-chain volume, has entered the overbought region as well. In 2019, the dormancy flow marked the top around $14,000, while in 2017, the ratio was over-extended for most of the year.

If the flow continues to increase, with buyers failing to keep up the price, Bitcoin could drop further to retest the previous high of $42,000.

The struggle between the bulls and bears in the next couple of weeks will be instrumental in setting the mid to long-term price as BTC reaches a crucial point.

Disclosure: The author held Bitcoin at the time of press. 

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Source: Read Full Article