Bitcoin Plummets 10% Below $42,000, Triggering Massive Liquidations
Bitcoin experienced a sharp drop of 10% below $42,000 on Friday, resulting in the liquidation of approximately $338 million worth of cryptocurrencies. This decline erased a significant portion of the asset’s recent gains, which occurred prior to the approval of multiple Bitcoin spot ETFs for public trading in the United States.
Over 101,000 Traders Liquidated in the Past 24 Hours
According to Coinglass, more than 101,000 crypto traders were liquidated within the last 24 hours. The largest individual liquidation involved a Bybit BTC/USD trade totaling $4.5 million. Most of the liquidations, amounting to $271 million, were on long positions.
Volatility Strikes as Stock Market Opens
Bitcoin started the day at $46,300 and experienced significant volatility when the stock market opened at 9:30 am ET. Similar to Thursday’s activity, Bitcoin ETF products saw a combined trading volume exceeding $1 billion.
New ETFs Attract Inflows While Grayscale Suffers Outflows
The newly introduced ETFs accumulated $700 million in flows after their first day of trading. Conversely, Grayscale’s Bitcoin ETF faced outflows totaling $95 million. However, following the selloff, it is speculated that Grayscale may have experienced even greater outflows today.
Hot Take: Bitcoin’s Sharp Decline Rattles Crypto Market
The recent sharp decline in Bitcoin’s value has had a significant impact on the crypto market. With prices dropping below $42,000 and triggering substantial liquidations, many traders have suffered losses. The approval of Bitcoin spot ETFs had initially brought optimism, but the subsequent decline has dampened the market sentiment. Volatility continues to be a defining characteristic of the cryptocurrency industry, and investors must remain vigilant. It remains to be seen how Bitcoin will recover from this setback and whether it can regain its previous momentum.
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