The crypto market has seen a widespread decline, with altcoins leading the downward movement. Even Bitcoin [BTC] has not been immune to the downturn, currently affected by the negative trend. At press time, Bitcoin’s price stood at $28,603, reflecting a daily dip of 1.95%. In the midst of this situation, individuals who were betting big on the asset were experiencing the impact of this drop.
Coinglass data revealed that 90% of total liquidations stemmed from long trades, representing anticipations of price increases. Liquidation transpires when an exchange compels the closure of a trader’s leveraged position due to a partial or full depletion of the trader’s initial margin. Over the span of 24 hours, liquidations amounted to $47.39 million, out of which long liquidations constituted $44.22 million. Short liquidations were at a dainty $3.17 million.
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After the recent liquidation event, Bitcoin traders appeared to be adopting a cautious approach. Traders were engaging in short positions rather than initiating long positions. Data sourced from Coinglass indicated that short positions comprised 52.82% of the total, surpassing long positions, which accounted for 47.16%.
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Will Bitcoin bounce back?
Earlier this week, an analyst named SimonaD shared her perspective on CryptoQuant concerning Bitcoin’s Unspent Transaction Output [UTXO]. UTXO highlighted the remaining cryptocurrency after a transaction has been completed. As per the analyst’s observations, the proportion of Bitcoin UTXOs that were in a profitable status had reached 79.53%. Nevertheless, when taking historical trends into account, a significant UTXO value may not always correlate with profitable price shifts. She further wrote,
“Usually, a high percentage of UTXOs in profit it may suggest that we have a risk of sell-off in the next period. When it acted as resistance, we had a price pullback.”
The recent decrease in Bitcoin’s price can be linked to this factor and the broader market sentiment. However, there has been a decrease in the portion of Bitcoin’s UTXO that are in a profitable state. Presently, this figure rests at 73%. This shift might suggest the potential for a resurgence in Bitcoin’s value.
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Nonetheless, it’s crucial to recognize that numerous other elements have the potential to influence the value of Bitcoin, carrying the possibility of either negative or positive impacts.
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