A Bitcoin trader lost 1,220 BTC on March 12, when the price of the dominant cryptocurrency dropped 50% in one day. As the downtrend of the cryptocurrency market worsens, large-scale liquidation of millions of dollars could occur again.
Last week, Bitcoin price briefly dropped to around $ 3,600 on BitMEX, resulting in liquidation of over $ 1.2 billion in long contracts.
Bitcoin's strong correction has been strengthened as the price of BTC fell from $ 7900 to $ 5000 recording a 35% decline. The original pullback caused a large number of long contracts to be liquidated or canceled, resulting in the BitMEX liquidation tool selling tens of millions of dollars in bitcoin each time.
Typically, large accounts on BitMEX and other exchanges trade with low leverage and that significantly reduces liquidation.
When the bitcoin price drops 30-40%, even low-leveraged accounts in the 3 ~ 5x range are easily liquidated.
That eventually led to accounts of more than $ 10 million starting to liquidate, adding a degree of massive selling pressure on Bitcoin.
As shared by trader I Am Nomad, a user on BitMEX Korea lost 1,220 BTC worth $ 11 million in BTC price before losing 50%.
This screenshot was shared during last night’s rally. 1220 realized BTC liquidation. pic.twitter.com/uk8WmWKEyp
– I am Nomad (@IamNomad) March 13, 2020
Although Bitcoin price has recovered from $ 3,600, it has declined $ 6,000 twice in the past two days with a double peak structure at lower time frames.
The strong refusal of $ 6,000, the resistance is much weaker than the $ 6,400, the previous yearly low, suggesting that there is not enough demand from buyers as the Bitcoin price continues to drop to as low as 4,000. dollars.
In the short term, due to the frenetic sell-off of high-risk assets in global financial markets, the institutional demand for Bitcoin is not expected to exist.
The Bitcoin Trust Grayscale premium has dropped from 30% to around 10-15% in the past two weeks, and according to entrepreneur Kim Dotcom, organizations have sold out their BTC massively in the recent downtrend.
What next for Bitcoin?
Given the correlation of bitcoin with the US stock market since the beginning of March, the weakness of the stock market will likely put more selling pressure on the entire cryptocurrency market.
Tyler Winklevoss, co-founder and CEO of major trading platform Gemini, said that Bitcoin is not a hedge against pandemics, and in the short term, it is not expected to respond positively to fears. outbreak.
You can see the price of Bitcoin here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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