Bitcoin price fell yesterday by over 10%, and price action has been on a downward descent since. The selloff was in response to a variety of factors, including the introduction of a new ban in India, a CFTC probe into Binance, and a debate over what was thought to be whale moving a billion in BTC.
During the correction, the second-highest record ever was set for largest amount of money liquidated in long positions. Interestingly, the last major correction was far deeper, but saw a similar level of liquidations. Here’s what that means for market sentiment, and how that could impact Bitcoin price action in the days ahead.
The second highest ever total long liquidations happened during yesterday's blood bath | Source: BTCUSD on TradingView.com
Monday Bitcoin Bloodbath Results In Second-Largest Purge Of Longs Ever
During most of 2020 aside from the initial onset of the pandemic, Bitcoin price was immune to any negative news, and kept on climbing against all odds.
The asset’s perfect storm macro environment has propelled it into the limelight of the finance industry, and to a price beyond $60,000 per coin over this weekend’s high.
Related Reading | Bitcoin Could Close March With First Ever Quarterly Bear Signal
Whether its due to technicals being overheated, a string of bad news, or the fact that traders were so heavily overleveraged, a selloff cut the price per BTC back by 10% starting late Sunday night into Monday afternoon.
The selling continues, though bulls are showing signs of building support. During the madness, some $1.6 billion of margin longs were liquidated, according to data from Arcane Research.
More than $1.6 billion in over leveraged traders were liquidated on Monday | Source: Arcane Research
Why Did The Correction Wipe Out So Many Cryptocurrency Traders?
Bitcoin is in a bull market, and whenever the trading range makes a clean breakout, the asset has been traveling at the rate of tens of thousands per month.
The trend has been “only up”…