Bitcoin drops by $ 5000 after reaching historic high, causing billions in losses

The flagship cryptocurrency bitcoin plummeted by 7% immediately after reaching a new all-time high of $ 69,000 on March 5. Then the price of BTC $65,755.33 Bitcoin -0.33% Market capitalization $1.3 trillion VOL. 24 hours $0.6 billion corrected, falling below $ 64,000.

More than $ 40 million in long bitcoin positions were liquidated within an hour of bitcoin hitting the ATN. Further, more than $ 1.13 billion in derivatives positions were liquidated across all digital assets. Coinglass data showed that $ 879.68 million of these were long positions, and $ 254.80 million were shorts. The drop in the value of BTC led to the liquidation of 308,465 traders.

Liquidations are key moments in the cryptocurrency markets. They occur when exchanges close leveraged positions because a trader’s margin falls below the required support margin.

Such events can increase market volatility and deepen price declines. Tuesday’s liquidation volume exceeds the $ 1 billion leverage figure recorded in August last year. Experienced traders compare Tuesday’s events to some of the worst market downturns.

«I think the worst day I’ve ever had in cryptocurrency was in March 2020. It was the day of liquidation. When Bitmex had to shut down operations to prevent BTC from falling to zero as liquidation mechanisms started working at full capacity. Everything fell by 70% in one day,» said crypto trader Pentoshi.

As a reminder, most market participants expect that halving and demand for bitcoin ETFs will push the world’s largest cryptocurrency to unprecedented price levels. As AMBCrypto reported a few days ago, the recent rise in BTC’s price has come amid significant institutional interest. For example, according to Coinglass, the open interest (OI) in BTC futures on the CME global derivatives exchange soared to a record high of $ 9.3 billion.