The cryptocurrency market is not suitable for the faint hearted. On the night between Saturday and Sunday, Bitcoin and other cryptocurrencies suddenly plunged over 10-15% before recovering quickly.
But the recovery did not necessarily bring good results for some traders: almost $ 1 billion of long positions on Bitcoin and Ethereum were liquidated during the operations.
Read on to find out more or you can take a look at our getting started guide for buy Bitcoins effectively and safely with the best trading platforms on the market to trade in a safe and regulated way.
A drop of $ 1.500
On Sunday morning at 4:30 UTC, Bitcoin saw a drop from $ 11,429 to $ 10,550 at 4:33 UTC. Prices were then partially recovered quickly, as Bitcoin's share price returned to $ 30 over the next 11 minutes.
As of press time, Bitcoin is trading at $ 11.150, with short-term forecasts indicating further downside. However, Bitcoin continues to appear strong at the moment and remains above its 34 and 50 day exponential moving averages (EMA).
The latest turmoil in Bitcoin prices has required between $ 800 million and $ 1 billion in long positions. The Block research director Larry Cermak wrote in a tweet that he noted that the largest single liquidation order (worth about $ 10 million) occurred on the BitMEX exchange, adding that "Most liquidations , about $ 647 million, came from Bitcoin futures, followed by Ethereum with $ 165 million in liquidations. "
The second significant volatility event for Bitcoin in 2020
Sunday's volatility event was the most important in the past few weeks. Bitcoin prices fluctuated between $ 9.200 and $ 9.500 for most of June and July, but developments around the Ethereum ecosystem and the DeFi market have led to a positive influx to the wider cryptocurrency market.
A similar case of volatility was last observed in mid-March during "black Thursday", when Bitcoin's price dropped 45% in two trading sessions apparently for no real reason.
Prices have slowly recovered from that time and have continued to rise even close to the halving of Bitcoin's mining reward on May 12, and have since remained in a narrow range of value.
Today's drop comes after Bitcoin has risen nearly 30% in the past week from $ 9.300 to over $ 12.000. Other cryptocurrencies followed suit, with Litecoin, Zcash, Ethereum growing between 20-35%.
According to the latest data, there has been a significant influx to Bitcoin and other large-cap cryptocurrencies since the beginning of 2020, indicating a huge retail interest and the entry of new capital into the market.
