The price of Bitcoin and other cryptocurrencies tumbled as the market cooled off after yesterday’s spike
As the market faced a sudden surge in capitalization and volume, the crypto community almost immediately entered a short-term euphoria, but a cold shower was closer than the market expected, the price of the first cryptocurrency having dropped to $39,250.
Liquidations spike up
Since most of the market entered strong euphoria, the number of long orders increased gradually, which created conditions in which the slight appearance of selling pressure caused a liquidation cascade.
According to CoinGlass, the liquidation volume of long orders reached $100 million, and most exchanges reported that around 90% of positions liquidated were long Bitcoin orders. In the past four hours, $60 million worth of orders have been liquidated.
Reasons behind drop
A sudden increase in selling pressure was most likely tied to the fading of euphoric tendencies after the short-term bounce on the market. The situation has not changed on the market, and risk-off tendencies still prevail.
Despite financial market relief, traders are still avoiding high-risk assets such as tech stocks and shares of companies related to cryptocurrency mining and trading. But at the same time, Bitcoin is still trading within the range formed in February, which shows that no major change in sentiment towards Bitcoin has taken place.
The altcoin market has also faced a spike in liquidation volume, and such currencies as Ethereum and Cardano lost approximately 5% of their value in the last four hours. A drop in the value of altcoins will most likely follow Bitcoin’s price action.
