Market Volatility Liquidates More Than $600M in Bitcoin Positions

More than $600 million were liquidated over the past few hours as Bitcoin goes through a volatile quarterly close.

Shutterstock cover by Antonova Katya

Key Takeaways

  • Bitcoin took a 5% nosedive within minutes to hit a low of $56,200.
  • The downswing generated massive losses across the board.
  • While some believe the move was part of a stop-loss hunt, technicals suggest a steeper decline.

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Volatility is rampant in the cryptocurrency market, wiping many overleveraged Bitcoin traders.

Bitcoin Wipes Out Overleveraged Traders

Bitcoin staged a 9,500-point turnaround in the past six days, gaining nearly 19% in market value. 

According to Willy Woo, the impressive upswing seemed quiet as it lacked any significant liquidations. Such market behavior was odd since speculators do not usually profit “without being a little bit rekt.”

“This is like walking into a forest and noticing the birds just stopped tweeting,” said Woo. 

Future Liquidations by Glassnode
Future Long Liquidations by Glassnode

Market makers seem to have heard Woo’s wise words as Bitcoin took a sudden 5.20% nosedive after peaking at a high of $59,920. Data from Bybt shows that $663,007,804 worth of leveraged positions were liquidated over the past four hours. 

The largest single liquidation order happened on the Seychelles-based cryptocurrency exchange Huobi, at a value of $14,680,000. 

Despite the massive losses incurred within such a short period, independent researcher and investor PlanB maintains that the recent downswing was part of a “stop-loss hunt” needed for Bitcoin to now march towards $60,000 or higher. 

Technicals Highlight Further Losses Incoming

From a technical perspective, Bitcoin looks bound for further losses. 

The Tom DeMark (TD) Sequential indicator presented a sell signal on the 12-hour chart. The bearish formation developed as a green nine candlestick, which is indicative of a one to four 12-hour candlestick correction. 

A further spike in selling pressure could see Bitcoin drop towards the 38.2% Fibonacci retracement level at $54,600 before the uptrend resumes.

Bitcoin US dollar price chart
BTC/USD on TradingView

Given the strength of the 78.6% Fibonacci retracement level at $59,300, only a 12-hour candlestick close above this resistance barrier could invalidate the bearish outlook. 

If this were to happen, Bitcoin would likely advance towards the recent all-time high of nearly $62,000 or higher

Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.

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