Commenting on Bitcoin’s recent movements, Mike Novogratz, CEO of Galaxy Digital, noted that BTC is in a price discovery phase, fueled by increased accessibility to US investors.
Bitcoin price’s roller-coaster ride took a steep dive on Wednesday, as the cryptocurrency witnessed a dramatic 7% plunge, wiping out millions in leveraged trades in epic liquidation and sending ripples across the digital asset market.
Bitcoin Liquidation Emerges from Rapid Surge and Sudden Plunge
The sudden downturn came after the price of Bitcoin surged past the $60,000 mark earlier in the day, hitting a high of $64,037 before tumbling back down to around $59,400. Despite briefly bouncing back above $61,000, another wave of selling pressure pushed it back to near the same level. However, at press time, Bitcoin was trading at $63,002.
Leveraged traders bore the brunt of this rapid swing, as liquidations cascaded through the market, totaling a staggering $700 million in losses for all digital assets within 24 hours, according to data from Coinglass. Notably, Liquidations occur when exchanges close leveraged trading positions due to insufficient margin or failing to meet margin requirements, amplifying losses for traders.
This latest market turmoil echoed memories of August’s dramatic events when Bitcoin’s plunge to $25,000 led to a billion-dollar liquidation frenzy across the crypto space. Both long and short positions faced the heat as prices soared and then plummeted, leaving traders reeling from the volatility.
The repercussions of Wednesday’s price action were felt far beyond Bitcoin, as major cryptocurrencies like Ethereum (ETH), Solana (SOL), XRP, Cardano (ADA), Dogecoin (DOGE), and Avalanche (AVAX) also experienced notable downturns, dropping between 4% to 9% within an hour.
The wild price movement also spurred record trading volumes for US-listed spot Bitcoin Exchange-Traded Funds (ETFs). Notably, BlackRock Inc‘s (NYSE: BLK) IBIT saw $3.3 billion in shares traded, more than double the previous day’s record.
Combined with other spot ETFs, total trading volume reached nearly $8 billion, Bloomberg’s Senior ETF Analyst, Eric Balchunas noted. This surge in activity highlights the growing interest in crypto investments, particularly among institutional players.
If we add in $GBTC the Ten still destroyed old record which was from Day One w/ nearly $8b pic.twitter.com/f1q61FtG7E
— Eric Balchunas (@EricBalchunas) February 28, 2024
Analysis of Bitcoin’s Recent Movement
Commenting on Bitcoin’s recent movements, Mike Novogratz, CEO of Galaxy Digital, noted that BTC is in a price discovery phase, fueled by increased accessibility to US investors.
“Hard to predict where we stop,” Novogratz said in a post on X.
Intriguingly, Bitcoin’s rally against government-issued currencies has been nothing short of remarkable, with recent all-time highs against major players like the Japanese yen, the Chinese renminbi, the Russian ruble, the Swedish krona, and the New Zealand dollar. This trend indicates Bitcoin’s growing stature as a global store of value and hedge against fiat currency depreciation.
Looking ahead, experts anticipate Bitcoin to continue breaking barriers against fiat currencies, with CEO Alex Svanevik of Nansen projecting new all-time highs against every major currency in the coming year. Despite short-term volatility, Bitcoin’s resilience and ability to transcend geopolitical and economic uncertainties reaffirm its status as the king of cryptocurrencies amidst a sea of digital assets.
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