In a bearish development for Bitcoin and the cryptocurrency market, the recent price decline of BTC has triggered a massive long-position liquidation. This negative incident which has caused a broader pessimism in the entire market emphasizes the dangers of leveraged trading and the intrinsic volatility of the cryptocurrency market.
Bitcoin’s Largest Long Position Liquidation In 2024
The recent drop in Bitcoin’s price appears to be a significant one as the decline has led to substantial losses of long position liquidation cited by recent data. Leveraged traders saw their positions completely drained as a result of the drop in the price of BTC, setting off a series of forced liquidations.
All-round trader and expert, Yonsei Dent shared the development in his recent research on the leading on-chain analytics platform, CryptoQuant. According to the expert, the huge liquidation witnessed on Monday marks the largest since the beginning of 2024.
Yonsei noted that traders saw their positions wiped out after BTC had a strong decrease of -30% from its previous short-term peak and a rapid downswing of up to -16% in the past 24 hours in light of a global stock market meltdown. Specifically, Japan’s increase in interest rates set off the meltdown, which had an effect on other major markets such as the US stock market, resulting in large losses in the cryptocurrency space.
Data shared by the expert disclosed that the abrupt move caused approximately 5,500 BTC long-positions to be liquidated over the course of a day. And based on the hourly closing price, the liquidation is valued at about $303 million.
Yonsei also highlighted a sharp decline in Bitcoin’s Open Interest (OI) following the recent decline. Key crypto exchanges like Binance, Bybit, and OKX, which make up the majority of the open interest witnessed a drastic drop to almost half of the overall interest.
During the time of the post, Yonsei claimed that BTC‘s price range was trending and finding support between the January high of $48,900 and the February consolidation range of $51,000 and $52,000. However, should the price fall below these support levels, it may jeopardize the Long-Term Holders’ (LTH) realized price.
Although BTC‘s bearish state seems strong, there is optimism about an impending recovery, as several bullish indicators have been cited on the asset’s chart such as a bullish flag pattern.
BTC Remains The Primary Focus Among Traders
Bitcoin may have plummeted over the past few days, but the crypto asset continues to be the primary focus of traders in this troubling period according to data from popular market intelligence firm Santiment.
Santiment revealed that while BTC and Ethereum have garnered overall interest within the crypto market, other more speculative coins that are being ignored by the crowd are surging as the market rebounds. Thus, the platform has advised investors to purchase the dip of these speculative coins, suggesting their potential to yield notable gains during times like this.
Featured image from LinkedIn, chart from Tradingview.com
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