Bitcoin’s recent price surge, crossing the $43,000 threshold, came on the heels of the U.S. Federal Reserve’s decision to pause rate hikes. However, this upswing was not without its perils. In the last 24 hours, a significant spike in volatility led to the liquidation of over $63 million in leveraged positions, as per Coinglass data.
The volatility in the market predominantly affected short-sellers, wiping out $38.4 million in short positions. Concurrently, long positions also suffered, with $24.7 million liquidated after a brief dip below the $43,000 mark. This volatility, reaching a multi-week high, has elevated annualized bitcoin volatility to 51.97%, indicating a turbulent phase for the cryptocurrency.
Ruslan Lienkha, Chief of Markets at YouHodler, suggests that the recent price correction is likely a result of profit-taking by short-term investors. Despite Monday’s market shake-up, Lienkha warns that this might not be an isolated incident. “Crypto traders are continuing to take elevated risks,” he says, hinting at potentially higher volatility
As bitcoin inches higher, the market remains on edge, balancing the thrill of gains with the risk of sudden downturns. This episode is a stark reminder of the crypto market’s inherent volatility, urging traders and investors to tread cautiously.
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