The cryptocurrency has been falling since Tuesday as Asian futures trended lower, triggering a wave of liquidations on the Bybit exchange.
The price is Bitcoin It fell 5.9% to $59,421.95 on Wednesday, according to Coin Metrics. ether It fell more than 4.5% to $2,469.50.
“The cryptocurrency market has crashed, triggering leveraged liquidations,” said Steven Lubka, head of private clients and family offices at Swan Bitcoin. “The move was likely triggered by a significant sell-off in Ethereum, which has struggled against Bitcoin throughout the year.”
Bitcoin drops below $60,000
The futures market saw $93.52 million in Ethereum long liquidations across centralized exchanges, where traders are forced to sell assets at market price to settle debts, according to CoinGlass. Bitcoin liquidations occurred at about $85.93 million.
“Leveraged rallies are usually great buying opportunities,” Lubka added. “We expect the market to buy Bitcoin on the dip, but Ethereum may continue to struggle until investors find a reason to be positive on the asset again.”
Bitcoin is still up 39% this year, while Ether is up a more modest 7%.
“This is exactly the kind of rapid liquidation and price movement we see in bull markets,” said Ryan Rasmussen, an analyst at Bitwise Asset Management. “The bulls get carried away and then the same happens with the bears. In the bigger picture, a 5% change in bitcoin price is just a tiny blip on the radar.”
August, normally a quiet month for cryptocurrencies and risk assets in general, has been particularly volatile this year. But cryptocurrencies are not uncommon for big pullbacks during bull runs. Bitcoin has remained stable in the $55,000 to $70,000 range it has held since April.
Some market participants noted that the crypto rally on Tuesday was fuelled by news that a federal grand jury had handed down an amended indictment against former President Donald Trump in the election interference case in Washington, DC.
President Trump has positioned himself as a pro-cryptocurrency candidate in the upcoming US presidential elections, while Democratic candidate Vice President Kamala Harris has yet to publicly express her views on the cryptocurrency industry.
“Traders don’t like volatility, so they often become risk averse and try to liquidate in such environments,” said Bartosz Lipinski, CEO of cryptocurrency trading platform Cube.Exchange. “Probably the same today.”
