March 6, 2024

Crypto Market Liquidations Soar Amid Bitcoin's Retreat from New All-Time High

Bitcoin experienced a sharp correction after reaching a new all-time high above $69,000, triggering a surge in liquidations, particularly impacting long positions amid heightened volatility.

In a momentous turn of events, bitcoin edged past its previous record, breaching the $69,000 mark and establishing a new all-time high. This milestone marks a notable progression in the cryptocurrency's trajectory, slightly surpassing its peak from November 2021.

This record-breaking feat extends beyond the US dollar, with bitcoin previously reaching all-time highs against various other currencies, including the Australian dollar, Canadian dollar, British pound, and more recently, the euro.

However, the euphoria was short-lived as bitcoin swiftly retreated below $60,000, triggering a wave of liquidations in leveraged positions.

Over the past 24 hours, heightened price volatility led to substantial liquidations of long positions on centralized exchanges. This volatility culminated in liquidations exceeding $320 million in bitcoin positions, with the majority ($245 million) affecting long positions.

Zooming out, the broader crypto market witnessed over $880 million in liquidated long positions in the last 24 hours alone, contributing to a total of $1.15 billion in liquidations across major centralized exchanges. Such levels of volatility and the ensuing high liquidation rates are unprecedented.

Liquidations occur when a trader's position is forcibly closed due to insufficient funds to cover losses. This typically happens when the market moves against the trader's position, depleting their initial margin or collateral.

This latest high disrupts the traditional pattern where bitcoin primarily reached new peaks following its Bitcoin block reward halving events, which occur roughly every four years. The next halving event is anticipated in April 2024.

While it remains to be seen if this immediately signals the onset of another upward momentum, it's not uncommon for bitcoin to undergo a period of consolidation before resuming its upward trend. Altcoins may also find opportunities to partially catch up with bitcoin's impressive performance during such pauses.

One thing remains indisputable: Bitcoin, the world's most popular cryptocurrency, has once again left an indelible mark on financial history.

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