The Bitcoin (BTC) fall below the $39,000 mark triggered some serious crypto liquidations totaling $115 million in just one hour. The most significant was a $5 million bet on a BTC price hike on Bybit. Coinglass data reveals hefty losses for traders hoping for the market prices to rocket further.
Bitcoin dived below the $40,000 mark for the first time since December 3, 2023. According to CoinMarketCap, Bitcoin went from $41,553 on January 22, losing more than 4.3% in the last 24 hours and 9.3% in the last 30 days. It hit a six-week low at $38,578.
What’s Behind the Sudden Price Drop?
Bitcoin’s price move comes from unfolding against the backdrop of the SEC approving 11 Bitcoin ETF spot products in the US. Meanwhile, Grayscale Bitcoin Trust (GBTC) sales are being accused of staging a market collapse.
On January 22nd, Grayscale listed over $600 million in BTC on Coinbase, pushing their total past the $2 billion mark. Meanwhile, the bankruptcy trustees at FTX decided to clean out their GBTC stake, selling their entire stock for $22 million, nearly equivalent to a billion dollars.
Crypto Market Shocks Doesn’t End
The cryptocurrency market appears to be in shock as not only Bitcoin prices have fallen to new local lows, but so have Ethereum, Solana, XRP, Dogecoin, and others.
Bitcoin traders just got hit with the punchline of the market downturn, losing over $80 million, with more than 60% of those losses coming from the “long” positions. Similarly, Ethereum speculators found themselves in a collective liquidation worth around $70 million, and the majority of these losses – approximately $60 million – are tied to traders betting that ETH prices would rise.
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Traders in alternative digital currencies have also suffered significant losses. Solana’s enthusiasts took $16 million worth of losses, XRP supporters lost $4 million, and the Dogecoin and Ordinal lost amounts of $5 million and $6 million respectively.
On the largest cryptocurrency exchange by trading volume, Binance, traders collectively misplaced $98 million, while over at OKX, they reported liquidations causing a collective sigh of $71. Meanwhile, ByBit and HTX recorded a combined loss of $63.52 million for their traders.
As of the time of writing, BTC has done a little jump, currently trading around $40,245. The previous large liquidation suggests that you cannot put all your eggs in one basket and hope only for higher prices. The cryptocurrency market is extremely volatile, and you should properly diversify your investments to avoid a large loss of funds in the future.
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