Cryptocurrencies slide amid a wave of lengthy liquidations, Bitcoin briefly falls under $60,000
Cryptocurrency losses extended on Wednesday after a wave of liquidations in leveraged crypto derivatives sent prices lower overnight.
The price of Bitcoin was last down 3.2% at USD 60,026.37, according to Coin Metrics. Overnight, the price briefly fell below the important USD 60,000 mark. ether fell more than 2% to $2,525.26.
“Crypto markets fell sharply, triggering a leverage-driven liquidation,” said Steven Lubka, head of retail and family offices at Swan Bitcoin. “The move appears to have been triggered by a significant decline in Ethereum, which has struggled against Bitcoin all year.”
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Bitcoin falls below $60,000
On Tuesday evening, the futures market saw $93.52 million worth of liquidations of long Ether positions on centralized exchanges within 24 hours, forcing traders to sell their assets at market price to pay off their debts. Bitcoin saw $85.93 million worth of liquidations.
“Leverage-driven flushes tend to be great buying opportunities,” Lubka added. “And while I expect markets to buy the dip in Bitcoin, Ethereum could continue to struggle until investors have a reason to be positive on the asset again.”
For the year to date, Bitcoin is still up 41%. Ether holds a more modest gain of 10%.
“This is exactly the kind of erratic liquidations and price movements we see in bull markets,” said Ryan Rasmussen, an analyst at Bitwise Asset Management. “Bulls panic and get wiped out, then it happens to the bears, and so on. If you zoom out, a 5 percent move in bitcoin price is a small blip on the radar.”
August, a normally quiet month for crypto and risk assets in general, has been particularly volatile this year. However, cryptocurrencies are nothing new to experiencing major pullbacks during bull markets. Bitcoin is still safely in the range it has been in since April – between $55,000 and $70,000.
Some market participants noted that the crypto decline accelerated on Tuesday as news broke that a federal grand jury had issued revised indictments against former President Donald Trump in his criminal election interference case in Washington, DC.
Trump has positioned himself as a pro-crypto candidate for the upcoming US presidential election. Vice President Kamala Harris, the Democratic candidate, has not yet publicly expressed her opinion on the industry.
“Traders don't like instability and in such environments they often switch risk to invest cash,” said Bartosz Lipiński, CEO of crypto trading platform Cube.Exchange. “That is probably the case today.”
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