Bitcoin’s Fall to $22,000 Triggers Second Biggest Liquidation Trend in 2023
Over the past 24 hours, Bitcoin has seen a drastic price drop. The value of the digital asset fell by over $1,200 in one hour, pulling it back into $21,000 territory for the first time in nearly a month. As a result, liquidations across the market quickly increased, passing $200 million in less than 12 hours.
Long traders get the ‘short’ end of the stick
Bitcoin was trending toward $23,300 for most of Thursday before the bears regained control of the market. It was particularly brutal given the uncertainty in the market and the buying pressure which has fallen significantly in the last week.
With bitcoin falling to $21,900 and then rising to $22,400, over 80,000 crypto traders were liquidated. In just 24 hours, liquidation volumes passed $215 million, and at the 24-hour mark, the figure was over $242 million, data from Coinglass shows.
Crypto liquidations cross $242 million | Source: Coinglass
The majority of liquidations were for bitcoin which had a liquidation volume of $84 million. This is understandable given Thursday’s decline was the most prominent in BTC, so losses quickly followed. That made for the second largest single liquidation event of 2023 so far, behind only the February 9 decline that saw over $254 million liquidated.
Long traders were hit the hardest as 91.9% of all liquidations came from long positions. Over the past four hours, however, things have started to skew towards short traders who are now seeing more losses as bitcoin has retaken the $22,400 level.
The largest single liquidation order was registered on the OKX exchange. The $4.2 million order was placed above the BTC-USDT-SWAP pair on the exchange.
Bitcoin is not looking good for recovery
As the hours have passed following Bitcoin’s price decline, the digital asset has shown no indication of recovery. It remains in the low $22,000s, which still puts it above its 50-day moving average, but there is no guarantee that it will continue to hold this level.
BTC price falls to $22,300 | Source: BTCUSD on TradingView.com
If bitcoin were to fall below $22,000 again, then $21,000 is the next possible strong support. This means that BTC needs to hold its current level or at least move above it, in order to enter the weekend with at least some momentum, otherwise the low liquidity usually associated with weekends will easily drag the price further down.
At the time of writing, BTC is exchanging hands at a price of $22,330. It is down 4.48% in the last 24 hours and registered a loss of 6.09% in the last week.
