Bitcoin’s Dip to $40k Triggers Over $300 Million in Liquidations
Welcome back to the Tribe! In this post we dive into the recent Bitcoin Dip and what it could mean for the overall market.
Nothing should be considered investment or financial advice. Enjoy the ride!
The world’s leading cryptocurrency by market capitalization, Bitcoin, has fallen below the $42,000 region after rallying to $47k last week. With the massive dip back to support levels around $38k-$41k, long traders experienced the most pain as over $300 million in liquidation calls were recorded in the last 48 hours alone.
Some crypto proponents have surmised that BTC could be in a sort of freefall and might revisit lower levels around $30k. Indeed, Bitcoin’s downtrend also caused broad-based retracements across the market as the total crypto market cap slipped below $2 trillion once again.
Whole Crypto Market Bleeds As Bitcoin Takes A Tumble
Following a massive rally towards the end of March and the beginning of April, Bitcoin soared up to $47,000 for the first time in nearly three months. Positive sentiment returned to the market and the total crypto market cap hit around $2.2 trillion.
However, BTC failed to break resistance at the $48k level and hovered in the $47,000 range for a few days. During Bitcoin’s rally, the majority of the market experience significant gains with major alts like Ethereum reclaiming the $3000 price range.
Solana broke back into the $100 dollar region and Terra’s LUNA also recorded massive gains.
However, a retrace in token prices was inevitable as BTC’s rally did not continue into the $50k regions. Following a lackluster weekend, Bitcoin has now fallen down to $39,800 according to data from CoinMarketCap. Ethereum’s token price also took a plunge and now trades at around $2993.
Apart from a significant dip in cryptocurrency prices, Bitcoin’s fall below $40k was also reportedly the catalyst for hefty liquidations over the past 48 hours. According to data from the on-chain market analysis tool CoinGlass, long positions worth over $320 million were liquidated following BTC’s tumble.
Long positions refer to trades that predict an increase in the price of a token. In other words, the trade is successful only if marker prices surge or go up. Also, long positions can only be liquidated if they are deployed on margin or futures trading platforms.
Miners Behind Bitcoin’s Latest Downtrend
While speculation remained regarding the reasons behind the Bitcoin dip, one technical analyst known as CryptoQuant identified BTC miner activity as the precursor for the ongoing decline in market prices.
According to CryptoQuant’s blog post, there was a significant outflow from wallets owned by miners prior to the $42k dip. Quant opined in their post that this event is somewhat bearish and indicates massive dumps from large BTC holders or whales.
As of the time of writing this report, it remains unclear if another Bitcoin rally is around the corner. For now, uncertainty persists in the market.
However, some institutions have reportedly taken advantage of the dip to bolster their BTC holdings. Terra added another 4,117 Bitcoin to its existing BTC vault.
Other News – NEAR Rallies
Layer one blockchain solution Near rallied over the past few weeks following two hefty fundraisers in January and April. The token’s price is approaching an all-time high region for the first time since January 2022.
Bitcoin’s Dip Post
Thanks for reading our post on the recent Bitcoin Dip. It might just be the best time to pick up some extra BTC to pad those HODL wallets.
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