Coinspeaker
Bitcoin Price Dives Under $60,000 Soon after Hitting New ATH, $1B Liquidated
Bitcoin (BTC) experienced a significant drop of over 10% after hitting its all-time high on Tuesday, March 5. The world’s largest cryptocurrency faced substantial selling pressure on crypto exchanges that prevented the price from surpassing $69,000.
The selling pressure was so huge that at one point, Bitcoin price dipped below $60,000. Despite reaching $69,200 earlier in the day, the order book on Binance displayed substantial sell orders, including over 300 BTC valued at approximately $20 million at the $69,000 mark, and more than 500 BTC available for sale at $70,000. As of press time, the Bitcoin (BTC) price is trading at $66,622 with a market cap of $1.31 trillion.
The volatile market movements led to a significant wipeout of leveraged positions, resulting in the liquidation of more than $1.1 billion worth of derivative trades across all cryptocurrencies in the last 24 hours, according to data from CoinGlass. Of these liquidated positions, approximately $870 million were long positions, indicating bets on increasing asset prices.
Excessive Leverage Cools Down
A significant portion of the recent price increases stemmed from optimistic speculations in the derivatives market. Bitcoin derivative investors have historically accessed leverage up to 100 times the value of their holdings through products like perpetual futures. Concurrently, open interest in Bitcoin futures reached an all-time high, surpassing $30 billion, reflecting heightened market activity and interest in Bitcoin trading.
Santiment, a provider of on-chain data, reported that total open interest on exchanges for Bitcoin experienced a significant decline following today’s all-time high for BTC. This drop in open interest, particularly notable for Bitcoin, signifies the closure of numerous over-speculative trades.
👍📉 Total open interest on exchanges for #Bitcoin, #Ethereum, and #Solana have declined significantly after the $BTC #AllTimeHigh earlier today. Many other assets not pictured show similar drops. Open interest is the amount of unsettled derivative contracts, mainly futures and… pic.twitter.com/NA3wJgaj0l
— Santiment (@santimentfeed) March 6, 2024
Vetle Lunde, senior analyst at K33 Research said:
“Traders should be careful with leverage in the reigning market conditions. Large price movements will wipe out over-leveraged positions before getting there.”
Bitcoin ETF Inflows Remain Strong
Bitcoin ETFs have witnessed strong inflows ever since their launch in January. On Tuesday, March 5, the trading volumes across all spot Bitcoin ETFs crossed a staggering $10 billion, as per Bloomberg ETF strategist Eric Balchunas.
On March 5, 2024, a significant milestone was reached in the United States with the Spot Bitcoin ETF witnessing an unprecedented surge in inflows. According to provisional data by Farside UK, the US Spot Bitcoin ETF received approximately $662.5 million in inflows, marking one of its highest daily inflows on record.
However, the spotlight is on BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s FBTC, which collectively attracted over $900 million in inflows. Specifically, BlackRock’s IBIT reported an impressive influx of $788.3 million, highlighting the increasing confidence of institutional investors.
Bitcoin Price Dives Under $60,000 Soon after Hitting New ATH, $1B Liquidated
