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Total liquidated positions surpassed $1.7 billion as Bitcoin (BTC) price fell to an intraday low of $94,150 on Monday. The appetite for profit-taking continued into Tuesday, with BTC still held below the $97,000 threshold at the time of writing.
This comes as the cryptocurrency market prepares for a volatile week, with several important economic events in the US on the schedule.
Total Cryptocurrency Liquidations Exceed 1.7 Billion USD
According to data from CoinGlass, 583,530 traders were removed from the market in the past 24 hours. The total liquidation amount exceeded 1.7 billion USD later. Of which, at least $1.552 billion are long positions, while $154.59 million are short positions.
Massive liquidations follow Bitcoin’s recent correction. The pioneering cryptocurrency fell to an intraday low of $94,150 on the Binance Exchange.
While the liquidation surprised traders and investors, the current market is both optimistic and skeptical. Still, Unipcs, a prominent user on X, urged caution.
“… [Đã đánh dấu] the largest long liquidation event since 2021. Large liquidation events like this almost always mark a bottom. This is not the time for panic selling. It’s also not the time to be too greedy or rush to increase leverage. It may be a good time to start scaling up high-conviction investment opportunities in the spot market, preparing for the next bullish boom,” user said.
Indeed, caution should be exercised when considering the expected impact from the US economic data to be released this week. As TinTucBitcoin reported, the consumer price index (CPI), weekly jobs data and producer price index (PPI) in the US could influence Bitcoin sentiment this week. These US macroeconomic data will reveal the state or health of the US economy.
However, for some, the massive liquidations brought a “clean sweep,” wiping out all altcoin funding rates. This means that a significant number of leveraged positions were forced closed due to the sharp market decline.
“All altcoin funding rates have been wiped out. This is a clean lane,” said Seth, a cryptocurrency analyst, comment.
The funding rate is the mechanism through which exchanges ensure that the price of the perpetual futures market remains in line with the spot market price. Liquidating multiple leveraged positions can lead to extreme volatility and price instability in the market. In many situations, this causes the funding rate to return to neutral levels.
Analysts believe such events help eliminate excessive leverage, speculative positions, and weak investors from the market. This paves the way for a healthier and more sustainable price move going forward. By eliminating over-leveraged positions, the market can find a more sustainable foundation for growth without the burden of excessive price-pushing speculation.
Data from TinTucBitcoin shows that BTC is trading at $96,682 at press time, down nearly 3% since Tuesday’s open.
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