The Bitcoin (BTC) crash at 3 a.m. led to hundreds of millions in liquidations. Over a period of an hour and a half, the price fell by almost 8%, with the largest drop occurring between 3:00 a.m. and 3:30 a.m. In total, this cost investors $318 million in so-called lungpositions and $32.5 million shortpositions.
Despite repeated “death declarations,” Bitcoin appears to be indestructible
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Hundreds of millions of liquidations due to Bitcoin price decline
Tonight between 2 and 4 p.m Bitcoin rate received a severe blow. Due to a sharp decline of almost 8%, liquidations amounting to three-digit millions were carried out. Over the last 12 hours according to Coinglass Liquidated positions worth $350.5 million. Most of this happened during the Bitcoin price decline.
When a trader enters into a long position, they often use borrowed money (margin) to fund the trade. When entering a long position, there is speculation that the price will rise. To the dismay of many traders, the stock had other plans.
If the price of a Crypto begins to decline, the value of the position may become too close to the amount borrowed. Then the trader could be forced to liquidate his position to avoid further losses. The trader then automatically sells his currency at a low price, thereby making a loss.
Despite the red crypto market, Solana and Cardano are in the green
Almost a month ago, a similar event occurred in the crypto market. Even back then, on November 15th, a Bitcoin price drop around $300 million in liquidations. The amount liquidated at that time was $332 million. The liquidations came after a comparable Bitcoin price drop of 6%.
Although the market is currently in the red, some cryptos have grown significantly recently. Last week, despite today’s decline, Bitcoin was still in the green at 2%. Also Solana (SOL) is still 13% in the green. The trend token Cardano (ADA) is currently the top performer, up nearly 38% in seven days.
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