Surge in Bitcoin Liquidations to Three-Year High Driven by Smaller Traders Leading Market Downturn

Byadmin

Dec 10, 2024
Surge in Bitcoin Liquidations to Three-Year High Driven by Smaller Traders Leading Market DownturnSurge in Bitcoin Liquidations to Three-Year High Driven by Smaller Traders Leading Market Downturn

Bitcoin’s recent price drop has resulted in a significant increase in liquidations, leading to a loss of up to 11% in the total crypto market on December 9.

According to research from Ltrd, the crash was driven by smaller traders rather than large investors. Bitcoin’s value dropped to $94,000, which was in line with earlier predictions and filled a market gap created on December 5.

Coinbase was identified as a major player in this situation, as aggressive selling began almost an hour before the price collapse. This selling pressure triggered a cascade of liquidations, forcing overleveraged positions to close.

The total value of crypto liquidations reached $1.57 billion, with Bitcoin longs suffering losses of $171.27 million, while Ethereum longs saw $235.04 million in liquidations. Ltrd highlighted that this event marked the largest liquidation since 2021, indicating a significant shift in market dynamics.

Despite the negative consequences, some traders consider the elimination of excessive leverage as a positive step towards market stability. Forced liquidations are seen as a necessary correction that helps reset the market and stabilize altcoins, with several altcoins successfully turning key resistance levels into support.

Ltrd also observed unusual behavior in the altcoin market, with assets like XRP experiencing a drop of over 5%. This has sparked speculation about potential market manipulation or other factors contributing to the sudden volatility. The overall reaction of the market reflects a combination of resetting and lingering uncertainty about underlying forces at play.

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