BTC Crash Leads to One-Billion-USD Liquidation

Judy Rubio

Crypto market specialists and analysts keep on researching the crypto industry’s possibilities. Its capabilities seem to be endless at times. However, there are situations that even the most advanced and experienced professionals cannot predict or foresee.

As many traders have already noticed, the crypto’s price crashed, and that occurred rather unexpectedly and fast. All the latest events took mere minutes to surprise the majority of sellers on the market – the price of the top-ranked cryptocurrency fell by approximately one thousand and four hundred USD.

It approached ten thousand six hundred USD and then slightly rebounded. At the same time, we can see that weekend volatility is still there keeping its pace

Mass media outlets report that the crypto’s price continues to plunge. For instance, BTC dropped by thirteen percent and ETH fell by twenty-one percent, accordingly – it took just a few minutes to happen.

Specialists claim that the recent movement was what triggered the liquidation of over one billion USD as the pair of USD and Bitcoin fell from approximately twelve thousand USD to a much lower level and reached ten thousand five hundred and fifty USD.

It is obvious that there might be two major reasons behind the fast and unexpected cascade of liquidations. First of all, the volume that the crypto market has seems to fall during most weekends. Next, the market itself has significantly been moved to buyers or those who prefer to keep long.

According to many specialists’ opinions, the move we saw during the past two days looks really surprising – it has managed to hit the crypto market one more time. It’s not a rare thing to witness impressive liquidations that occur at the weekend.

Many professionals say that liquidity frequently falls since there are not enough active traders in the sector. One the other hand, low volumes cause serious price movements because cryptocurrencies tend to be more sensitive and vulnerable. As reports say, mass liquidations can be seen during many weekends as one instance of liquidation that is large and powerful can cause a whole series of further liquidations.

Whenever long contracts go through liquidation, they may provoke the individual to consider market sell, which, in turn, could cause pressure on sellers. Analysts confirm that BTC and ETH dropped very quickly when millions of USD started to be liquidated.

Thorough Studies and Analysis of the Trend

BTC decreased from twelve thousand USD to ten thousand six hundred USD and it took the process only fifteen minutes to happen. ETH declined from four hundred and seventeen USD to three hundred USD. Users have seen several liquidations that are as massive since the end of February.

Moreover, in mid-March, one billion USD worth of liquidations also happened. Next, not long before the 11th of March, the price of the crypto fell to eight thousand one hundred USD and that led to mass liquidations. Both currencies were greatly swayed  and the trend move towards buyers.

The previous week showed that BTC’s upsurge over eleven thousand USD made the crypto market take a heavy sway toward buyers. Participants admit that the funding rates of both assets were about levels that cannot be sustainable during prolonged periods. Several future exchanges employ a method known as ‘funding’ to introduce balance to the market.

Those would be such companies as Binance Futures and not less popular BitMEX. If the greatest part of all market participants opts to hold long contracts, then those holding short might be stimulated with a certain fee. Before the drop occurred, the funding rate of the top-ranked asset was remaining around 0.0721%.

Due to the current average rate of the crypto, long contracts can easily dominate the entire market. For ETH, the imbalances in the market were even more visible. The funding rate for this asset was at 0.21% and this proves obvious bullish bias. Data illustrates that ETH long holders remained in the trend and were not removed while this is what happened with those dealing with BTC.