Bitcoin sees biggest sell-off since 2021 as 'crazy' reset wipes out $1.6 billion
Bitcoin and cryptocurrency sell-offs mount amid “unusual” market conditions.
Bitcoin sees biggest sell-off since 2021 as 'crazy' reset wipes out $1.6 billion
Bitcoin liquidations
92.658 €
have hit three-year highs as a fresh BTC price drop drives the market to a popular target.
New research from the X account Ltrd reveals 'crazy' trader behavior, while the total cryptocurrency market capitalization plummeted by up to 11% on December 9.
Analysis: Coinbase traders sold bitcoin 'aggressively'
Bitcoin met expectations during the first trading session of the week on Wall Street, dropping to near USD 94,000.
This constituted around 50% of a large bearish wick since December 5, one that had created a market 'inefficiency' that had a 96% chance of being filled, according to the analysis.
Although this was fulfilled, the liquidations that accompanied the price drop bore little resemblance to last week’s cascade.
"Today's dump resulted in the largest liquidation since 2021," summarized Ltrd.
Chart of the BTC/USD pair with market impacts. Source: Ltrd/X
Analyzing the movements of the exchanges, Ltrd revealed that the largest trading platform in the United States, Coinbase, was crucial in triggering the bearish momentum.
"We saw something crazy: Coinbase traders started selling aggressively almost an hour before the mega dump," he continued.
"Of course, the biggest drop was triggered by a cascade of liquidations, but this constant selling pressure was crucial to bring the price to a region where over-leveraged positions were forced to close."
CVD data for Binance and Coinbase. Source: Ltrd/X
An attached chart compares the accumulated volume delta (CVD) data for both Coinbase and the largest global exchange, Binance.
"It is certainly unusual"
CoinGlass data calculates that the total cross-cryptocurrency liquidations amounted to USD 1.6 billion in the 24 hours leading up to the writing of this article on December 10.
Of these, BTC longs suffered less than Ether longs.
tickers down
3579.05 €
with USD 142 million compared to USD 208 million liquidated, respectively.
"This has been the largest long liquidation of this bullish cycle so far," he confirmed to his followers on X.
Cryptocurrency liquidations (screenshot). Source: CoinGlass
While reactions lamented the 'gore of the liquidation' for altcoins, more optimistic takes see the possibility of a return to more stable market conditions.
"With that leverage out, the market has reset; altcoins have returned to very important support levels. It's a good thing," wrote popular trader Jelle in part of his latest comment on X.
For its part, Ltrd drew attention to the 'unusual' nature of the cascade; several altcoins, including XRP.
2.13 €
, were closely monitored.
"Something absolutely strange has happened. In a large and relatively mature market, we witnessed a cascade of large sell orders that caused the market to drop more than 5%", the analysis notes.
"We don’t know exactly what happened, but it is certainly unusual."
