Including the rest of the cryptocurrencies, there was a USD 2.18 billion settlement in 24 hours. The pioneering cryptocurrency has fallen from USD 58,000 to USD 51,000 in the past few days.
In just 24 hours, the price of Bitcoin (BTC) fell below USD 52,000, going down by 10%. That drop has brought the pioneering cryptocurrency to levels from a couple of weeks ago. Besides, it caused the liquidation of more than USD 1 billion in open positions on various derivatives platforms.
According to data from ByBt, there was a total liquidation of USD 1,020 million in long positions in that period. That happened on the various exchanges that allow trading with Bitcoin futures.
There was a drop of close to USD 500 million on Binance alone in that period. On the ByBit platform, widely used for these operations, there was a liquidation of almost USD 300 million in Bitcoin futures.
Long positions represent a bet on the rise of price in a certain range in the futures market. The credit granted by the house leverages these negotiations, thus allowing higher profits than in spot trading.
If the price goes in the opposite direction to the position that the trader opens, there is a risk of liquidation and capital loss in favor of the house. This is what happened with the above-mentioned positions, which were betting on the price rise when it fell.
A Settlement above USD 2,000 Million in the Entire Market
The cryptocurrency market has historically gone in the direction that Bitcoin takes. For that reason, the main altcoins have accompanied the fall of the first cryptocurrency, also causing multi-million-dollar settlements.
There were other losses of USD 1 billion in long positions on other cryptocurrencies. Among them are Ether (ETH), Binance Coin (BBNB), Cardano (ADA), and Polkadot (DOT). By adding all the currencies, having open futures markets, and the losses in Bitcoin, the figure reaches USD 2.18 billion.
Just between ETH, DOT, and Ripple’s XRP cryptocurrency, there was a settlement of more than USD 500 million in 24 hours.
Many of these traders were probably expecting a bounce that would send Bitcoin back to flirting with USD 60,000. However, the fall of BTC, as well as that of the other cryptocurrencies, took them by surprise.
Settlement of Bitcoin Options and Outlook for the Future
The recent price action of Bitcoin could be part of a pattern. According to influencer @juanbiter, since October, Bitcoin has maintained a similar behavior when major settlements approach the options market.
That pattern has been one of a sideways (or bearish) behavior of the price of Bitcoin. The liquidity providers of these markets are pushing for the cryptocurrency to reach a price that suits them at the closing of contracts.
This time, the target price is around USD 44,000 per BTC, as they predict. That number still seems a long way off as BTC is above USD 52,000, but it has dropped by more than 12% this week.
The forecast seems to coincide with still optimistic estimates within this bullish cycle. After the drops and the contract closing date, Bitcoin has risen by as much as 30% in the following weeks.
According to various analysts, the cryptocurrency that Satoshi Nakamoto created will hit all-time highs between USD 100,000 and USD 300,000 this year. A boost similar to those of previous months, following the expiration of contracts, would take Bitcoin to USD 70,000 very soon.
By Alexander Salazar