- About $310 million in Bitcoin futures positions were liquidated in last 24 hours.
- Bitcoin’s OI fell by 12% following the peak.
In a dramatic turn of events in the last 24 hours, Bitcoin [BTC] made a historic climb to its new all-time high (ATH) before a sharp correction cut the party short.
After ascending to $69.3k during U.S. morning hours on 5th March, the king coin retraced, falling as low as $61k by afternoon, according to CoinMarketCap. The crypto regained some strength to $66k at press time, narrowing its 24-hour drop to 1.19%.
Derivatives market goes for a toss
The roller-coaster trajectory triggered liquidation of $310 million in Bitcoin futures positions over the last 24 hours, according to AMBCrypto’s examination of Coinglass’ data. About 70% of the liquidated positions belonged to longs.
Source: Coinglass
Moreover, the climb to ATH caused a significant decline in Open Interest (OI) for Bitcoin. According to Santiment, about $1.46 billion in OI was wiped out in the hours following the peak, marking a 12% drop.
The OI fall was attributed to liquidations of longs targeting $70k, the willful closure by longs anticipating ATH, and liquidations of shorts who bet against the ATH.
Source: Coinglass
Positive signals?
Santiment viewed this development with optimism, hoping that the derivatives market’s influence on Bitcoin’s price would decrease, allowing for greater organic growth in the future.
That being said, longs were still dominant on Binance at press time, according to the exchange’s funding rate. A large number of limit orders were still placed at $70k. Hence, the next bounce towards this level would be worth watching.
More damage could follow
The retracement brought the network’s profitability down to 97%, having jumped t0 100% just a day before. The 30-day MVRV Ratio, or the average unrealized profits, dropped to 15.13% at press time.
Source: Santiment
Read BTC’s Price Prediction 2024-25
Interestingly, noted technical analyst Ali Martinez had warned of the bearish implications of the MVRV crossing the 18% level shortly before Tuesday’s dramatic moves.
Martinez had predicted,
“Since February 2021, each time it crossed the 18% threshold, BTC price plunged by 24% to 55%.”
Though the prophecy did come true, Bitcoin bulls would hope that the damage won’t be as significant as previous instances.