Investors are taking advantage of the fall in the price of bitcoin

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Over the past day, the bitcoin rate dropped below the key $19,000 mark and tested the lowest level in the last nine weeks. BTC/USD has formed a local low at $18,700. This is the lowest value since July 2022.

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At the time of publication, the bitcoin rate is holding near local lows. During the day, the first cryptocurrency fell by 5%. Losses for the month approached 20%.

Someone buys BTC on recessions

Despite the price collapse, the number of wallets with 1-10 BTC balances has surpassed 750,000. The number of addresses with 1-10 BTC balances has been steadily increasing since the end of December 2021, ever since the price dropped below $50,000.

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Addresses by balance. Source: Intotheblock

Experts are confident that the main driver of demand is interest from institutional investors.

According to the head of the hedge fund SkyBridge Anthony Scaramucci, this factor will contribute to the growth in the number of active bitcoin wallets. It also transforms the cryptocurrency into an inflation protection tool.

Financial institutions such as BlackRock are seeing a steady increase in interest in bitcoin, despite the fact that it has lost almost two-thirds of its value since November 2021.

British investment conglomerate Abrdn and Charles Schwab are already mastering bitcoin pools: Abrdn bought a stake in a crypto exchange, and Schwab launched a cryptocurrency exchange product.

Large-scale liquidations

The collapse in prices provoked a large-scale liquidation of positions in the market. Volume of liquidations per day exceeded $355 million, while at the peak of the sell-off, positions worth more than $40 million were closed in just an hour and a half. A significant part of the liquidations occurred on a fall below $18,964. On OKX and Binance, positions were closed in the amount of $83 million and $140 million, respectively.

The position is liquidated when the price falls below the margin call level for leveraged positions. For example, to open a $25,000 position with 50x leverage, a trader only needs to deposit $500. He buys $25,000 worth of bitcoin, but if the BTC price falls by more than 2%, the trader will lose his $500 invested and his position will be forcibly liquidated. This is a high-risk strategy, so the amount of leverage available to retail traders is highly regulated.

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Source: Cryptocurrency

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