Bitcoin price drop triggers over $1 billion in liquidations

Bitcoin (CRYPTO:BTC) experienced significant volatility recently, resulting in a flash crash that saw its price plummet from $100,000 to $90,000. 

This sharp decline triggered over $1 billion in liquidations, impacting approximately 156,000 traders globally. 

According to data from Coinglass, nearly $900 million in Bitcoin positions were liquidated during this period, marking one of the largest sell-offs since the FTX (CRYPTO:FTT) collapse in 2022.

The liquidation event included $816.8 million in long positions and $279.6 million in short positions. 

The largest single liquidation was valued at nearly $19 million on the OKX exchange.

“This is the most substantial liquidation event since FTX’s insolvency,” crypto commentator McKenna stated, as analysts have drawn comparisons to the FTX crisis.

Despite the turmoil, some buyers have stepped in to take advantage of the situation. 

“Spot buyers are now stepping in, hovering up the liquidation cascade,” McKenna noted.

Adding to the market uncertainty, Mt. Gox recently moved 3,620 BTC valued at approximately $352.7 million to new wallets shortly after transferring $2.43 billion in Bitcoin when prices initially surged past $100,000.

Speculation regarding potential Bitcoin sales by the US government has also contributed to market jitters.

“This is what happens when retail investors succumb to FOMO and open leveraged long positions at all-time highs,” financial analyst Jacob King stated, criticising overleveraged retail investors.

In contrast, some large investors capitalised on the dip. 

Blockchain analytics firm Lookonchain reported that a whale purchased 600 BTC worth around $58.85 million during the price drop.

This acquisition brings their total accumulation over two weeks to 1,300 BTC valued at approximately $127 million.

Despite these liquidations, some analysts view this event as a necessary correction within Bitcoin’s bull market. 

At the time of reporting, the Bitcoin price was $98,109.83.