Bitcoin Plummets to $29,000 in a Shocking Sell-Off, Wiping Out Over $160M in Crypto Liquidations Dominated by Longs

"Bitcoin Plunges Below $30,000: Sudden Sell-Off Triggers Panic Among Investors"

Bitcoin (BTC) experienced a sharp decline of over 3% in just 15 minutes during European morning hours on Wednesday, falling below the $30,000 mark. According to CoinDesk data, the cryptocurrency’s value dropped further to $29,000. While there was no immediate fundamental reason for the sell-off, it is believed that a massive market sell order of bitcoin from crypto exchange Binance and an unexpectedly high UK March inflation figure of more than 10% may have influenced market sentiment. Additionally, a “long squeeze” may have contributed to the decline. Over $25 million in bitcoin futures were liquidated, with longs, or bets on rising prices, accounting for 98% of the positions.

Vetle Lunde, a senior analyst at K33 Research, noted that the hotter-than-expected UK CPI may have weighed over risk assets, including BTC. However, Lunde also stated that the gravity of the reaction has been far more severe than in other asset classes. He believes that it is more of a leverage washout, with Binance OI in BTCUSDT perps falling 5.1% in 15 minutes, and the effects being more severe in ETH with larger liquidation volume than BTC. Prominent Crypto Twitter trader @52kskew pointed out that a 16,000 bitcoin sell order, worth over $467 million at current prices, preceded the sudden dump, which may have likely initiated the long squeeze. @52kskew opined in a follow-up tweet that “16K BTC is unusual size to be market sold solely from Binance spot usually the kind of sale happens before bad news comes out.”

Liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of their initial margin. It happens when the investor is unable to meet the margin requirements for a leveraged position, and they don’t have sufficient funds to keep the trade open. Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.

The decline in BTC’s value led to a sell-off in the broader crypto market. Ether (ETH), polygon (MATIC), and dogecoin (DOGE) fell 5.3% in the past 24 hours, while solana (SOL) lost nearly 9%. The sudden drop in bitcoin’s value has caused concern among investors, with many questioning whether this is the end of the cryptocurrency’s bull run. However, some experts believe that this is just a temporary setback and that BTC will recover in the coming weeks.

In conclusion, the sudden decline in bitcoin’s value has been attributed to a massive market sell order from Binance, an unexpectedly high UK March inflation figure, and a long squeeze. While the broader crypto market has also been affected, some experts believe that this is just a temporary setback and that BTC will recover in the coming weeks. Investors are advised to monitor the situation carefully and make informed decisions based on market trends and expert analysis.

Martin Reid

Martin Reid

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