Bitcoin (BTC) lost more than $3,000 within 24 hours after reaching a peak of $19,380. The sales pressure turned into a 16% loss to investors. Analysts compare these falls to the COVID-19 situation in early 2020.
The drastic drop in the bitcoin price surprised investors just after the largest crypto in terms of market capitalization reached a new peak of $19,380. The drop within 24 hours brought BTC's price down to $16,300, after which it rebounded and overcame a resistance level of $17,000. The data suggests that mass liquidations were the driving force behind mass correction.
Before the bitcoin price dropped, interest in the Bitcoin futures market reached a new record. The derivatives market was also overheated by buyers. The combination of the two factors resulted in a sharp drop in BTC prices as futures trading volumes increased. Futures contracts worth over a billion dollars were liquidated, as was the case with the crash of 12 March. November 2020 may bring even greater losses.
Data suggests that nearly $1.9 billion worth of futures contracts were liquidated. According to Glassnode, a data analyst, Binance Futures has seen the biggest increase in the liquidation of long positions of $425 million.
As bitcoin prices began to fall, whales or high net worth investors sold a lot on the major exchanges, deepening BTC drops. At the same time, OKEx announced that it had restored payouts. Ki Young Ju, founder of the network analytical service CryptoQuant, noted the increased activity of outflows from OKEx to both walletsand other exchanges, which amounted to 493 BTC at the time.