Bitcoin recorded a massive liquidation after its digital asset fell from $40,000. The majority have been dominated by long-term liquidations as hundreds of thousands of traders have seen their positions liquidated. However, as the cryptocurrency price began to settle around the $30,000 level, liquidation began in earnest. It leads to one of the lowest liquidation volumes in the last two weeks.
Liquidation collapses to $128 million
Cryptocurrency liquidation started to decline When Bitcoin started reaching $30,000. The liquidation, which shook primarily the space, was the result of a sharp price movement. As volatility has recently been minimized, the liquidation size has also decreased during the same period.
Read Related | Bitcoin fees remain low despite increased activity. What drives this?
As a result, the liquidation amount for the entire market in the last 24 hours was less than $130 million. This is in stark contrast to the previous week, when Bitcoin and Ethereum liquidated more than $100 million for a single asset. The cryptocurrency market has recorded liquidations of up to $400 million, most of which have been long-term liquidations.
Total liquidations at $123 million | Source: Coinglass
Bitcoin liquidation has also decreased significantly. In the last 24 hours, the pioneer cryptocurrency has crossed just over $35 million. Most of these also came from short-term liquidations, a welcome change after long-term traders took a hit in the past few weeks.
Similarly, Ethereum liquidation slightly outpaced BTC, but at a lower level. The second-largest cryptocurrency by market cap hit $36 million last day, suggesting that liquidation is being felt across the market.
Is a bear market coming?
It can be said that liquidation points to a more ominous short term for the cryptocurrency market. For example, because there are so few liquidations, it means that traders are taking fewer and fewer positions. What this could inadvertently mean is that traders are currently on the lookout for the market.
Crypto market cap at $1.29 trillion | Source: Crypto Total Market Cap on TradingView.com
But this doesn’t seem to be the case. This can very well show that more long positions are currently open. Long downtrend periods, such as those typically experienced by markets, can culminate in a massive recovery. In this case, taking more long positions will be in the best interests of the trader.
Read Related | Bitcoin Open Interest, But All Hope Is Not Lost
Nevertheless, the market seems to be showing signs of recovery since early Monday morning. Bitcoin is trading in the mid-$30,000 range, with the overall cryptocurrency market cap hovering above $0.1289 trillion.
Featured image from Yahoo Finance, chart from TradingView.com