Rivers of blood ran in the cryptocurrency market between this Monday, February 22 and Tuesday, February 23, when the price of bitcoin (BTC) had a correction of more than 20%, falling from 57,500 to less than 45,000 dollars in its lowest point of this Tuesday.
Between both sessions, bitcoin has had the worst red candles in its history. On Monday, with a range above $ 10,000 between its high and low And this Tuesday, the candle also exceeded $ 9,000 as shown by TradingView market data.
Although the candle on Monday had a greater range, the opening and closing price suffered a smaller fall than the one that took place this Tuesday at the time of writing this article. On Monday, the price of the main cryptocurrency fell from USD 57,485 to 54,173.
Bitcoin opened this Tuesday with its price above 54,000 dollars and reached its lowest point at USD 44,845. And although it rebounded and is currently hovering around 47,000 dollars, the fall seems to hold more than the previous day.
Both candles become the largest in the history of bitcoin on the market. Not only in negative terms, as they have also had a higher range than that of the largest green candle in history, reported by CriptoNoticias on the 9th of this month.
On that occasion, bitcoin rose more than $ 8,000 in one day, marking what still remains the most winning day of the cryptocurrency in its history.
With the correction of these days, BTC has fallen more 18% from the new all-time high it set last weekend, when it first exceeded $ 58,000. However, remains above the price reached that February 9 with an apparent support above USD 40,000.
More than 2,000 million dollars in bitcoin settled in a day and a half
After maintaining a powerful bullish pace for days, the bitcoin correction seemed to take everyone by surprise. In a range of just 36 hours, more than 2,000 million dollars in long positions of the bitcoin derivatives market were liquidated, in ByBt data.
Long positions are “bets” of the traders on the rise Price. As they are predictive markets, the user speculates with positions predicting price movements in certain time ranges. In this case, the trader risks his capital if the price of the asset contradicts his prediction.
In case of breaking a certain price in the opposite direction to that expected in the position, the risk capital is liquidated in favor of the derivatives platform where it is operating. What happened in these last few days is that thousands of long positions were liquidated with the fall of BTC in a short time.
As we said initially , the blood has run in the cryptocurrency market in full. The vast majority of cryptocurrencies have maintained their correlation with the behavior of bitcoin and have dropped considerably accordingly.
And if we take into account the cryptocurrency derivatives market, liquidated long positions amount to more than $ 5 billion in just a day and a half. ByBt’s graph shows how in just 12 hours some 3.3 billion dollars fell this Monday and another 2,000 in the same range today.
The first week of January, CriptoNoticias reported a record of liquidations to bullish positions on Binance, the exchange that moves the largest volume of the cryptocurrency market, both in spot and derivatives.
At that time, in a period of just 10 minutes, almost 200 million dollars were settled in the platform of Chinese origin. Now, this February 23 there was a settlement of more than USD 270 million in 15 minutes. In that same period, another 177 million were settled on another exchange: Huobi.
Janet Yellen, US Secretary of the Treasury: behind the bitcoin crash?
There are those who see the United States Secretary of the Treasury, Janet Yellen, as responsible for the fall of more of 20% of the price of bitcoin. The movement in the price of the cryptocurrency has coincided at a certain point with statements made by the secretary this Monday.
As reported by various media, Yellen referred to bitcoin as “An extremely inefficient way to carry out transactions”. During an interview with the New York Times, Yellen stated that bitcoin was very energy consuming and does not believe it will become “widely used” for transactions in the future.
In contrast, the former president of the Federal Reserve assured that a hypothetical digital dollar could effectively exercise the role of a means of payment, unlike bitcoin . However, did not give further advances on the plans to digitize the North American currency , which have been discussed for years.
Some media in the field Traditionalists associate the fall of bitcoin with these words from Yellen, historically conservative with respect to cryptocurrencies and very in favor of firmly regulating bitcoin.
The correction in the price of the cryptocurrency, however, was already in progress since the early hours of this Monday , before the political figure issued those statements against bitcoin.
Fix “healthy” for bitcoin
Analysts see in this sudden drop a necessary correction for this bullish cycle of bitcoin. For example, the experienced trader and market analyst Peter Brandt, assured a few hours ago on Twitter that a correction of 20% “It may be enough for the market to be healthy again.”
Additionally, it calculated possible levels for a greater correction, of up to 35 % , taking as reference corrections from the past bullish cycle, which culminated in the 2017 high with BTC close to $ 20,000.
In Brandt’s estimates, bitcoin could end to correct to about $ 37,938, although he considered that the 41,986 could be a good entry price before BTC resumes its upward course.
Previously, Willy Woo had evaluated this stage as the consolidation phase of bitcoin as an asset of 1 trillion dollars in capitalization, a barrier that broke this weekend.
With the correction of these last days , bitcoin It fell below that level again, but a bounce at the end of the correction could see bitcoins in circulation again equal to more than $ 1 trillion. To do this, the cryptocurrency created by Satoshi Nakamoto would have to exceed $ 53,700 again. But in Woo estimates, the next price target is well above that level, around $ 63,000.
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