LIVE UPDATES
Data from the Coinglass has revealed that the cryptocurrency market has suffered a massive setback, with about $900m wiped out in the last 24 hours.
Long positions accounted for $764m of the liquidations, while short positions made up $124m, according to the report.
The liquidations highlighted the risks traders face when trading on unregulated Bitcoin derivative exchanges, where positions can be aggressively closed by the exchange’s risk engine when they reach the liquidation price.
According to the report, "While a small number of liquidations may have a limited impact on the market, the simultaneous liquidation of thousands of positions can significantly move prices, triggering a 'cascading effect' that may liquidate additional surrounding positions."
Bitcoin’s price however took a further hit on Monday morning, dipping to $53,000 on Binance, its lowest level since late February this year.
Coinglass noted that the cryptocurrency’s decline was attributed to a combination of factors, including uncertainty in the US economy, investor withdrawals, and increased market turbulence.
While reacting to the market impact, Crypto investment analyst Okoro Nnamdi cited a highly anticipated liquidation due to the formation of a “cup and handle” pattern in technical analysis.
The cup and handle pattern indicates a potential breakout to the upside, as the price is expected to rise above the resistance level formed by the top of the cup.
“The liquidation is highly expected because Bitcoin is building what we call in technical analysis a ‘cup and handle’ formation. However, it is trying to close the CME (Chicago Mercantile Exchange) gap—a price gap on the CME Bitcoin futures chart—and consolidate for about two months before flashing a warning sign of a potential upside move,” Nnamdi said.
Despite the expected liquidation, Nnamdi remained optimistic about Bitcoin’s long-term prospects, setting a target price of $150,000 for the cryptocurrency going into 2025.
“Overall, my target in Bitcoin going into 2025 is $150,000. The institutions are using this opportunity to accumulate the deep,” he added.
