Bitcoin price continued to decline tonight and at some point dropped to the level of $ 53,200. Although Bitcoin was trading at this level only four days ago, the difference from the new all-time high of about $ 62,000 is 14%.
At the same time, liquidations continued. More than $ 750 million have been liquidated in the past 12 hours, according to Bybt, after the daily value topped $ 2 billion on Monday. The number of traders liquidated in 24 hours exceeded 200,000.
“Over the past hour, about $ 500 million has been liquidated in long positions on bitcoin. This is a historic maximum. There is an excess of greed in the system – 60% of contracts are opened with a leverage of 20x or more. The liquidation of long positions is a characteristic feature of the current bull market “, – stated at the analyst firm Glassnode yesterday.
Unknown wallets
In the cryptocurrency community, meanwhile, disputes have arisen over the ownership of certain wallets. Depending on who owns these wallets, the flow of funds to them could be bullish, bearish or neutral. For example, CryptoQuant identifies one wallet that received over 18,000 BTC ($ 1 billion) yesterday as belonging to the Gemini exchange. Market participants have doubts about this, at least due to the fact that Gemini does not have the liquidity to absorb such a volume of cryptocurrency.
“Did the whale really send 18,000 BTC to Gemini to sell on the market? Or is it a data error? – writes analyst Willie Wu. – CryptoQuant sent out a warning about the “whale” preparing the sale to 28,300 traders. For the next minutes, the speculators were selling. ”
Wu also notes that the price of bitcoin on Gemini at this time was in line with the market average, although it was expected to deviate with large sales. If the transaction went through the Gemini OTC platform during the purchase of bitcoin by institutions, it would be a bullish signal as confirmation of interest in the cryptocurrency at current price levels.
“$ 3 billion in contracts were sold, resulting in $ 450 million in liquidations. Binance reports that 80% of its traders use leverage above 20x. The sale of $ 3 billion translates into $ 5,300 in collateral for 28,300 retail traders with 20x leverage. I’m not even in this notification group, but they sent me a message in a few minutes, ”Wu adds.
Optimism and the Fed
Open interest in the bitcoin futures market on March 13 reached a record $ 22.5 billion, an increase of 39% over the month. This was not prevented by the liquidation of $ 4.5 billion in futures contracts in February. Funding rates and the level of overpayment speak of continued optimism among traders.
Bitcoin’s current decline is in spite of the rise in the stock market. The S&P 500 added 0.6% on Monday to close at a record 3968.94. The Nasdaq Composite and the Dow Jones were both higher. At the previous stage, bitcoin formed a positive correlation with the indicated indices and was included in the number of assets that showed growth in the context of a decrease in government bond yields. Yields were down 0.02% on Monday, but still remain near a 13-month high.
The Federal Open Market Committee of the US Federal Reserve is holding a meeting today and tomorrow, the results of which may predetermine the behavior of investment assets.
“The meeting is likely to determine the profitability and risks in the coming days, if not weeks,” writes Deutsche Bank strategist Jim Reid. “Chairman Jerome Powell is likely to talk about the continued uncertainty and remoteness of recovery, especially in the labor market.”
At the time of publication, bitcoin is winning back positions after an overnight fall. Vailshire Capital CEO Jeff Ross argues that the cryptocurrency will remain in a long-term upward channel from its November rally point as long as the price holds above $ 52,000.
According to the analyst, such a technical picture suggests the possibility of reaching the $ 100,000 level in the coming months. He also notes that blockchain-level metrics, including growth in addresses and activity, remain bullish, while macroeconomic conditions remain extremely bullish.
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