Bitcoin lost 2 percent in value in a short time and fell below the $ 68,000 level for the first time in the last four days. Following this move, a total of more than $50 million in long positions was liquidated in the crypto futures markets within an hour. Approximately 70 percent of these liquidations resulted from Bitcoin transactions.
Liquidation effect in crypto markets
The recent decline was also felt in technology companies directly tied to Bitcoin investments. It is especially known for having a large Bitcoin portfolio under the management of strategy firm Michael Saylor. Additionally, a decline was observed in Circle Internet and Coinbase stocks before the futures market opened.
Investors who open long positions in the futures markets predict that the prices will rise, and liquidations occur when the prices fall to certain levels and the position is forced to be closed by the brokerage firm when the investor’s existing collateral is not deemed sufficient. When the liquidation map of the last 48 hours is examined, a significant amount of liquidation risk below the $ 66,000 level stands out.
Since this level indicates major liquidation points, it is thought that downward pressure on Bitcoin may continue in the short term.
Macro developments and market pressure
In parallel with the negative atmosphere in the market perception, the funding rates used in continuous futures transactions are also negative. A negative funding rate means that open short position holders are paying those who opened long positions and indicates that prices may move down.
Macroeconomic conditions also put pressure on the market. While the economic effects of the ongoing tension in the Middle East continue, US 10-year Treasury bond interest rates have reached their highest level since July, approaching 4.5 percent. These rates may reduce the attractiveness of cryptocurrencies, which are considered risky assets, for investors.
The MOVE index, which measures the volatility in the US bond market, rose by 18 percent in the last 24 hours and increased uncertainty.
On the oil side, Brent and WTI type crude oil prices increased by 3 percent. It was stated that Ukraine’s disruption of Russian oil flow was effective in this increase, and US President Donald Trump’s plans to increase capacity were disrupted.
In addition, the DXY index continued its rise and approached the 100 level. The appreciation of the dollar against major currencies has come to the fore as an additional pressure on the performance of risky investments such as crypto assets.
