Bitcoin leveraged longs liquidated after brief mid-week recovery above $30,000
- Bitcoin leverage traders felt the heat as unexpected crash triggers heavy liquidations.
- Bulls still in charge despite the liquidation shock.
Bitcoin [BTC] traders were in for a rollercoaster of price performance during 26 April’s trading session. Bitcoin briefly managed to rally back above $30,000, leading to euphoria about its bullish prospects but another crash sent it below $28,000.
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To put things into perspective, Bitcoin’s market cap fell by roughly $49.13 billion from its highest point on that day. This officially makes 26 April the most volatile day in the last seven days. Note that, despite the sharp crash the market cap recovered slightly.
Leveraged long liquidations fueled the Bitcoin volatility
The $30,000 retest attracted an unusual amount of volatility. One major reason for this is that the price was previously on a bearish trend, followed by a brief period of uncertainty regarding market direction.
However, the midweek outcome demonstrated a return of bullish volumes, hence the uptick and retest of the $30,000 range which previously demonstrated resistance.
Many traders saw the recovery as a sign of demand and a possible push past the resistance range. As such, many traders in the derivatives segment were convinced that Bitcoin would offer a good rally, hence they embraced leverage. This explains why Bitcoin’s recent slap-down resulted in heavy liquidations.
Previous 1-month high of $11,622,461.85 was observed on 19 April 2023
— glassnode alerts (@glassnodealerts) April 26, 2023
Bitcoin’s long liquidations on 26 April soared to their highest level so far in the month. The liquidations also triggered a sharp drop in the estimated leverage ratio as leverage traders quickly shifted to the side of caution.
The Bitcoin long liquidations highlight some of the risks in the market. Some analysts believe that the recent rally was a setup for whales to secure exit liquidity.
Bitcoin’s brief rally presented the perfect opportunity for a leverage shakedown. Traders were high on hopium given that the market previously struggled to find enough momentum.
The news that another major bank was in trouble further supported the bullish expectations. Investors should also note that there might also be a bear trap ahead.
How many are 1,10,100 Bitcoins worth today
Bitcoin has already recovered slightly in the last few hours to its $28,995 press time price. The timing is particularly noteworthy because most investors will be sitting on the sidelines after the mid-week events.
There is still some uncertainty regarding BTC’s next move, especially as the market rolls into a new month.