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Bitcoin crash caused all-time record liquidations for traders on Binance – Explica

Key facts:

The price of bitcoin fell from $ 33,148 to $ 28,130 in a span of 4 hours.

In mid-December, the peak of settlements was below USD 50 million.

A sudden drop of more than 15% in the price of bitcoin in a few hours caused the liquidation of more than 190 million dollars in positions to traders on the Chinese exchange Binance. Specifically, long positions were liquidated in the exchange platform’s futures market.

Long positions are those in which traders bet on a price increase, with profit in case the price reaches specific levels. Positions that go for a bearish bet are called short or “short”. In case the price goes in the opposite direction to the “bet” or prediction and touches a particular level down, the trade is settled with the loss for the trader.

The figure, caused by the brief price drop this Monday, January 4, represents a record of liquidations in such a short period, according to data from analytics firm Glassnode. In fact, on this company’s chart for the liquidations on Binance, you see a previous peak just under $ 50 million.

bitcoin operations settled binancebitcoin operations settled binanceThis chart shows the record of millions of dollars liquidated to long positions this Monday. Source: Glassnode.

In a matter of hours, the price of bitcoin (BTC) went from $ 33,148 to $ 28,130, catching those who bet on the rise in the exchange’s derivatives market by surprise.

Amid a rise of around 82% in a matter of weeks in the price of bitcoin and after the break of its all-time highs, bullish sentiment seems to have taken hold of traders who went long (betting on the rise). And the correction that brought BTC to the $ 28,000 level again caused the losses described above.

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Although the downturn appears to have set off alarms of a large correction, the pioneer cryptocurrency’s price rebounded above $ 28,130 and currently appears to stabilize again above $ 30,000.

Bitcoin trading volumes soar too

Bitcoin remains at a rate of constantly exceeding marks in its price and the capitalization of the entire cryptocurrency market surpassed its all-time high of 2017. Meanwhile, exchange activity has also clearly risen in recent days.

At the time of writing this note, during the last 24 hours bitcoin trading volume has been above $ 83 billion, after having broken the 85,000 million for the first time in that period this Sunday, as reported by CriptoNoticias.

The upward momentum has been such in recent weeks that, even though not all cryptocurrencies have seen significant increases, the total capitalization is already above $ 840 billion, according to CoinMarketCap.

increase market capitalization cryptocurrencies in dollarscryptocurrency market capitalization increase in dollarsThe total capitalization of the cryptocurrency market exceeds $ 840 billion. Source: CoinMarketCap.

The milestone has been broken with the two major cryptocurrencies breaking through major price levels. In the case of bitcoin exceeding $ 30,000 and establishing a new all-time high (ATH).

Meanwhile, Ethereum’s cryptocurrency, ether (ETH), passed $ 1,000 in price for the first time since 2018. Thus, this coin begins to approach its own ATH, set above $ 1,440 in 2018, according to CoinGecko records.


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