Traders in the crypto leveraged market saw massive losses when Bitcoin suddenly plunged below the psychological $100K support line.
According to data from CoinGlass, the event triggered liquidations across the market valued at more than $1.08 billion, of which over 80% were long positions amounting to approximately $817 million.
The largest single liquidation order occurred on OKX—a BTC-USDT-SWAP contract worth $19 million. High funding rates and Thursday’s price movement indicated that many traders were over-leveraged, expecting prices to continue higher. Forced liquidations caused a sharp price drop as the market turned against them.
It had earlier been warned by analysts that market participants should be cautious of profit-taking along the way, as asset prices rarely go “forever” in a straight line. In perpetual futures contracts, funding rates are the cost paid by traders with long and short positions to maintain their contract.
Recently, these rates have been high, indicating many traders had taken bearish positions, which was atypically long.
The funding rates were so high, indicating many traders had assumed prices would keep going up and thus over-leveraged themselves. Thursday’s sharp price movement is testament to this.
Price Action
Bitcoin changes hands around $98K. On the daily chart, the RSI at 64 is rejecting its overbought level of 70 and points to weak bullish momentum. A continued decline in the leading cryptocurrency may see it extend its correction and retest its $90,000 support level.
Fundamentals Still Healthy
On Wednesday evening, Bitcoin surged to $103,844 after news broke that President-elect Donald Trump would nominate Paul Atkins to take over as chair of the Securities and Exchange Commission. And the move could complete a high-profile campaign promise he’s made to the crypto space: booting Gary Gensler, an unpopular incumbent at the head of what critics have called an aggressive enforcement-based regulatory approach at the SEC.
The return of the Republican leader to the White House, backed by Elon Musk, is seen as good news for the digital assets sector, giving the industry a new credibility.
Grateful for the industry’s financial backing, Trump has changed his tune on cryptocurrencies, doing a complete about-face from his previous stance as he now pledges to make the U.S. “the global center of Bitcoin and cryptocurrencies.”
In a Thursday morning Truth Social post, Trump congratulated Bitcoin investors, saying, “Together, we will make America great again,” and noted that “you’re welcome” for his contribution to Bitcoin’s surge to $100,000.
Thursday is a day of celebration for long-time Bitcoin investors who have “HODL’d”—holding on through several boom-and-bust cycles when financial institutions and the government were often hostile or indifferent to the asset class.
Traders in the crypto leveraged market suffered heavy losses after Bitcoin suddenly plunged below the psychological $100K support line.
According to data from CoinGlass, the event saw liquidations across the market amount to over $1.08 billion, with more than 80% of these liquidations, approximately $817 million, coming from long positions.
The largest single liquidation occurred on OKX, with a BTC-USDT-SWAP worth $19 million. High funding rates and Thursday’s price movement had shown that the majority of traders were highly over-leveraged for upward continuity. This created a forced liquidation resulting in a steep fall as the market went against them.
There was a previous warning by analysts that along the way, one should be careful with the profit-taking on the table, noting asset prices are rarely moving “forever” in a straight line.
Funding rates in a perpetual futures contract are meant to be paid by those taking long and short positions while maintaining their contracts. Notably, in recent instances, the rate has come out high as many had taken bearish positions unusually long.
The funding rates were so high, and the movement of the price on Thursday was so sharp, meaning many traders over-leveraged themselves, assuming that prices would keep on going up.
Bitcoin changes hands around $98K. The RSI on the daily chart has retreated from its overbought level of 70 and currently hovers at 64, suggesting weak bullish momentum into the apex cryptocurrency. Should the decline persist, Bitcoin could extend its correction and retest its $90,000 support level.
On Wednesday evening, Bitcoin soared to $103,844 after President-elect Donald Trump said he would nominate Paul Atkins to head the Securities and Exchange Commission.
The move may finally deliver Trump’s biggest campaign promise to the crypto space: a replacement for Gary Gensler, who’s been the most contentious name because of the SEC’s regulations-by-enforcement approach.
The return of the Republican leader to the White House, backed by Elon Musk, is seen as good news for the sector of digital assets, which now has credibility it could only have dreamed of 16 years ago when the currency was created.
Thanks to the financial support of the industry, Trump reversed his stance on cryptocurrencies, after having previously been an opponent, now seeking to make the U.S. “the global center of Bitcoin and cryptocurrencies.
In an early Thursday morning post on Truth Social, Trump congratulated Bitcoin investors, saying “Together, we will make America great again,” and added that “you’re welcome” for his contribution to Bitcoin’s surge to $100,000.
Today is a day of celebration for long-time Bitcoin investors who have “HODL’d”—holding on through several boom-and-bust cycles when financial institutions and the government were often hostile or indifferent to the asset class.
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