Corrections in the cryptocurrency market are inevitable. Shortly after Bitcoin rallied past the crucial $40k last week, the growing volatility in the market led the crypto-asset’s plunge of more than 15% over the last 24-hours. Bitcoin tanked to a price of $33,942. This, in turn, triggered massive liquidations on several derivatives platform over the weekend.
According to the latest stats, $1.22 billion longs were liquidated following Bitcoin’s abrupt fall close to the previously breached level of $35k. Moreover, as per the data provided by bybt, $219.2 million shorts were liquidated in the process.
Interestingly, the largest liquidation for long positions occurred on the leading exchange Binance’s platform which totaled $447.29 million. In fact, Binance saw $90 million of futures contracts long liquidations within just 10 minutes of Bitcoin’s downside correction. This was revealed by the CTO of blockchain intelligence platform, Glassmode Rafael Schultze-Kraf, whose tweet read:
— Rafael Schultze-Kraft (@n3ocortex) January 10, 2021
This was followed by other derivatives platforms such as Bybit with $302.7 million and Huobi with $233.5 million respectively.
As the Bitcoin market plummeted by roughly $7,000 in a matter of hours, the long sentiment fell into the negative realm, in tandem with which the shorts dropped too, even though the more longs were liquidated than the shorts.
According to the latest chart by Datamish, the longs dropped to -562. Nevertheless, the figures appeared to be recovering as it increased to the press time value of -78. The shorts did not see much fluctuation and remained above -243 for the entire period before flipping to the positive side at 22.
Positive Bitcoin fundamentals ensue
The cryptocurrency market was in a very interesting stage at the moment. In terms of the price, BTC has been soaring higher and hitting new peaks almost every day and hence a healthy correction could, in fact, mitigate the chances of a more damaging correction in the coming days.
Despite having to establish a strong footing above $40k, BTC address activity has continued to grow at a historic rate thus, strongly backed Bitcoin’s price run.
Ki Young Ju, the CEO of South Korea-based analytics firm CryptoQuant suggested that miner selling contributed to the price drop as Bitcoin went down right after Miner Position Index reportedly approached to make a local top.
A quick primer: The 30-day average of Miner’s Position Index is essentially the ratio of total miners’ outflows in terms of USD divided by the 365-day moving average of the outflows in USD. MPI surged all the way to 2.20 on the 10th of January after it bore the previous level that was hit back in July 2019. Notably, a reading above 2.00 demonstrated that the miners were selling.