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Cryptocurrency market witnesses massive short liquidation

TL;DR

  • The crypto market saw big short liquidations, wiping out $87 million in bearish bets, hitting Ethereum, Bitcoin, and Dogecoin hard.
  • Bitcoin bounced back, reclaiming $46.3K, showing strength despite market turbulence.
  • Traders need to watch Bitcoin’s support at $43.5K and the $50K mark for signs of further bullish momentum.

In a dramatic turn, the cryptocurrency market experienced a wave of short liquidations totaling approximately $87 million, dealing a blow to bearish sentiments. Among the assets affected most significantly were Ethereum, Bitcoin, and Dogecoin, with liquidations amounting to $272,000, $227,000, and $80,000, respectively. 

These rapid price movements triggered cascading liquidations due to traders’ widespread use of leverage, coupled with liquidity challenges on certain trading pairs.

Impact on market performance

The aftermath of these liquidations has left many traders in the bear camp facing significant losses while potentially laying the groundwork for a sustained rally. The elimination of short positions has alleviated downward pressure on prices, potentially setting the stage for short-term rallies as the market adjusts to the reduced number of bets against the assets. 

However, the market now grapples with increased uncertainty as traders tread cautiously in the wake of such substantial liquidations.

Bitcoin shows resilience amidst market volatility

Despite the market turmoil, Bitcoin has exhibited remarkable resilience. The leading cryptocurrency’s recent price trajectory has seen it reclaim the $46.3K level, a feat not witnessed since early January. 

This robust recovery underscores renewed confidence among investors and reflects the underlying bullish sentiment prevailing in the market.

Key price levels to monitor

While the current liquidation events have favored those with long positions, traders and investors are urged to exercise vigilance. The unpredictability of the markets remains a constant factor. In the near term, crucial price levels to monitor for Bitcoin include the support level at approximately $43.5K and the psychological barrier at $50K. 
Breaching these levels could signify a new phase of bullish momentum, further shaping the trajectory of the cryptocurrency market.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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James Kinoti

A crypto enthusiast, James finds pleasure in sharing knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. The latest innovations in the crypto industry, crypto gaming, AI, blockchain technology, and other technologies are his preoccupation. His mission: be on track with transformative applications in various industries.

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