As Bitcoin fell below $74,000, over $1 billion in leveraged positions were liquidated, followed by a rapid market recovery.
Bitcoin fell to $73,761 as risk appetite in global markets suddenly weakened. Following this low, the lowest level since August, buying activity pushed the BTC price back above $75,000. Ethereum also recovered to around $2,144 after falling below $2,100 during the sell-off.
The sharp price movements created a difficult situation for investors using leverage. Over $1 billion worth of positions were liquidated in the cryptocurrency market in the last 24 hours, with approximately $913 million of that amount consisting of long positions opened in anticipation of a price increase.
Liquidations in Ethereum transactions reached $448 million, while liquidations in Bitcoin reached $272 million. The largest single liquidation recorded occurred in an Ethereum position worth approximately $48 million.
The selling pressure wasn’t solely influenced by developments specific to the crypto market. Reportedly an independent investigation launched into Nvidia’s management and statements regarding the inconclusive US-Iran talks increased anxiety in global risky assets. The allegations against Nvidia are still under investigation, and the company states there is no reason to believe that trade secrets were compromised.
From a technical perspective, the 200-day moving average, corresponding to approximately $73,150, is seen as a support level, while the 100-day moving average, at $77,430, is considered a significant resistance level. The brief decline and subsequent recovery have once again demonstrated that in highly leveraged trading, position size is just as critical as the direction of the trade.
*This is not investment advice.
