USD 500M Liquidated as Bitcoin Falls Below USD 60K, Ethereum Below USD 4K

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Fredrik Vold

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October 23, 2023

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Nearly USD 500m in long positions were liquidated across the crypto market in just one hour on Wednesday, as the price of bitcoin (BTC) fell below the psychologically important USD 60,000 level, and ethereum (ETH) dropped below USD 4,000. (Updated at 10:00 UTC: updates throughout the entire text.)

At 09:51 UTC, BTC trades at USD 58,949, after almost touching USD 58,000 earlier today. The price is down by 6% in a day and almost 9% in a week, trimming its monthly gains to 36%. 

ETH is now fluctuating around USD 4,000 and is down by almost 4% in a day, trimming its weekly gains to less than 4%. The price is up by 31% in a month. 

According to data from Bybt, total long liquidations of USD 486m and short liquidations of USD 12m were seen in the hour between 07:26 and 08:26 UTC. In total, the 1-hour liquidations amounted to more than USD 500m, with the crypto exchanges Binance and Bitfinex by far contributing the most to the high figure. 

Total liquidations:

Worth noting for ETH is that the price did find support around USD 3,950, which was the local market top from early September. A correction down to this level could therefore be seen as a retest of the support just below the USD 4,000 mark.

The fall in the bitcoin price today followed a warning from Ki Young Ju, CEO of the crypto analysis firm CryptoQuant, yesterday that a metric for estimating leverage across all exchanges had reached its highest level for the year.

“It seems obvious that the market is over-leveraged now. We’ll see some volatility shortly,” the analyst said.

$BTC estimated leverage ratio is about to hit a year-high. It seems obvious that the market is over-leveraged now.

We'll see some volatility shortly.

Live Chart👇 https://t.co/W0oDOA6qNl pic.twitter.com/rSL1Yoma22

— Ki Young Ju (@ki_young_ju) October 26, 2021

Meanwhile, open interest in bitcoin futures traded on the Chicago Mercantile Exchange (CME) reached another all-time high on Tuesday, after having risen by over 265% since the end of September, data from CME showed.

According to the on-chain analytics firm Glassnode, the rising open interest can be partly attributed to the launch of new exchange-traded funds (ETFs) in the US that are backed by the CME-traded futures contracts.

Looking at the premiums paid to get bitcoin exposure through CME futures, however, it seems that institutional players are not as eager to go long on bitcoin as they once were. At 09:34 UTC, CME’s bitcoin futures contract expiring in October traded at USD 58,635, representing a discount to Coinbase’s spot price of USD 58,995 at the same time.

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Reactions:

It was a possibility with the funding being overheated.

— Njui (@RasJohnNjui) October 27, 2021

Don't worry. At least some hedge funds got their tote bags at $25 billion valuation recently. That's what really matters in this world, isn't it right?

— Joe007 has nothing to teach you💀 (@J0E007) October 27, 2021

$100k likely won’t come until February, but this bull run is not “over.” We’ll just retest the $48-52k in November before the next leg up for $BTC.

November-December will be for alts.🤝

— The Captain ◎ (@solcapitano) October 27, 2021

This $btc dump doesn’t mean bear market started.

Wait out let the dust settle, see how derivatives react then punt again.

— MS📈 (@singhsoro) October 27, 2021

🔻a little dip downward?

I warned you guys about this exact price action well advance on multiple occasions. #Bitcoin  is now likely forming
“The First Floor”

Sit back relax and buy the dip https://t.co/6ZGl8pqBPuhttps://t.co/6Oh2F7l8Ge

— Kevin Svenson (@KevinSvenson_) October 27, 2021

Dips are for buying if you know they are dips.

— Daniel Mateos (@danielmateos) October 27, 2021

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Learn more: 
– ‘Extreme Volatility’ Expected as Bitcoin Investors Learn to Value It
– Bitcoin Futures ETF to Start Testing Market on Tuesday Amid Pullback Talks

– Almost Third of Professional Investors Sidestep Advisors to Buy Crypto – Survey
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