Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
Founders of Glassnode disclosed that there was an all-time high record of $500 million in Bitcoin getting liquidated.
The price of Bitcoin has taken its usual pullback soon after hitting an all-time high price of $61,000 on March 15. Many traders believe that this is a normal market behavior as after hitting around $58,000, the price of the digital asset took a nosedive to fall as low as $45,000.
In the most recent attempt to break the $61,000 resistance level, Bitcoin was highly betrayed by sellers forcing the asset to trade down the price curve before pushing a comeback to a current price of $56,000. Interestingly, it was disclosed that liquidations worth about $500 million were triggered on the various exchanges.
Some Possible Reasons Why the Price of Bitcoin Took a Nosedive
The price of Bitcoin is not known for random movement on the price curve, but it is a product of market news, and other determinants that have a strong influence on demand. Recently, two important platforms in the Defi industry on the Binance Smart Chain, Pancake Swap (Cake) and Cream Finance (Cream) were reported to have suffered from severe DNS Spoofing Attacks.
Investigation reveals that the plan was to obtain the private keys of users on the website through a phishing attack. The platforms have sounded a word of caution to users to not attempt to log onto their accounts but to keep their account phrases and private keys safe. This affected their prices with cake falling by 6.39% in the last 24 hours.
Another reason that may have caused Fear, Uncertainty, and Doubt for sellers to move out of the market can be linked to the possible cryptocurrency ban in India. It has been in the air that the possession, transferring, trading, or even issuing cryptocurrency could subject users to punishment as ordered by the law.
Jan & Yann, founders of Glassnode disclosed that there was an All-Time high record of $500 million Bitcoin long getting liquidated. It is worth noting that Glassnode previously got it right about a possible bull-run prediction that sent the price to an unimaginable height. Bybt also provides that about $800 million liquidations triggered were in just 15 minutes. These are caused by what they classify as excessive greed as about 60% of contracts levered at least 20X, pushing a bull run. The Bitcoin Fear and Greed Index has confirmed that there has been a decline of the greed category to a ranking of 71. This means the market sentiment is cooling down.
There is still hope that the price of Bitcoin may recover and overtake its All-Time high as the Covid-19 relief package may be the underlying factor. A survey suggested that out of the $400 billion relief package for US citizens, 10% will be used to buy Bitcoin and stocks. If this happens, then another bull-run of Bitcoin is inevitable.
Also, there is a record of $22.5 billion In the open interest of the Bitcoin future which indicates another bull-run. The Price of Bitcoin was projected by some experts to trade as high as $100,000 even before breaking its near $20,000 all-time high. It is just a matter of time for the digital asset to test the six-digit price zone.