$1.89 billion liquidated: Why did Bitcoin and ETH price correct sharply overnight?

Напоследок 24 часы, $1.89 billion worth of futures positions were liquidated after Bitcoin (BTC) и эфир (ETH) sharply fell below $46,000 на Binance.

BTC/USDT 15-minute price chart (Binance). Источник: TradingView.com

Most of the liquidations came from Bitcoin and Ether, which accounted for $555 миллион и $336 million respectively. Но, altcoins, like XRP, EOS, и Litecoin (LTC) also saw large liquidations as the market plummeted.

Liquidations across crypto exchanges. Источник: Twitter @CryptoRank_io

The lion’s share of the liquidations happened on Binance while Bitfinex saw the least. This suggests that the former may have the biggest share of novice traders, according to Bitfinex CTO Paolo Ardoino.

Bitfinex has almost 1B in open interest but extremely low liquidation rate compared to competition,” explained Ardoino.

Finex seems to have traders that use leverage slightly more carefully.

Factors behind the short-term price drop

Bitcoin was relatively resilient compared to the rest of the market during the correction. Mostly, large-cap altcoins and DeFi tokens saw the biggest losses, such as Cosmos (АТОМ) and SushiSwap (СУШИ) dropping by over 20% за один день.

The market likely corrected as a result of the altcoin futures market being extremely overheated for a prolonged period.

In recent weeks, many altcoins on platforms like Binance Futures saw funding rates spike to around 0.3% к 0.7%. Это 30 to 70-fold higher than the average 0.01%.

This is likely the reason behind Bitcoin’s relatively small drop of around 7% по сравнению с 20% к 30% corrections in the altcoin market.

Но, unlike Bitcoin, Ether showed short-term weakness even as Bitcoin was rallying to a new all-time high, как сообщает Cointelegraph.

Следовательно, when BTC began to drop, Ether saw a much larger drop compared to Bitcoin, dropping by 9% in the same period.

Throughout February, especially when the ETH/BTC pair was showing strength, ETH saw a smaller pullback compared to Bitcoin as it entered price discovery. The weakness of ETH against Bitcoin had a negative impact on the altcoin market in the last 24 часы.

Why a recovery is likely

По словам Ки Ён Джу, генеральный директор CryptoQuant, there are enough stablecoin reserves in the cryptocurrency exchange market to trigger another leg up for Bitcoin.

In the crypto market, sidelined capital is often stored in stablecoins rather than cash or in bank accounts since they are much easier and faster to deploy on exchanges. Ki said that it is an ideal time to buy Bitcoin given that a newfound rally is more likely. Он написал:

“If you’re a long-term investor, now is the time to buy $BTC. Not sure how many corrections would be along the way, but the on-chain indicator says there are enough stablecoins in exchanges compared to Bitcoins to get another leg up.”

Stablecoins Ratio. Источник: CryptoQuant

In addition to favorable fundamentals, altcoins have begun to recover quickly after a capitulation-like correction.

Following the strong relief rally of altcoin, Bitcoin and Ether followed suit, recovering to $48,000 и $1,800, соответственно.

The combination of the swift recovery of large-cap altcoins and the abundance of stablecoins on exchanges raises the probability of the BTC rally to continue.

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Источник: Cointelegraph

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