Bitcoin Plummets to $64K, $250M in Long Bets Vanish
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Written by
Yana Levkovich - Updated 2024-07-25 15:53:02
Bitcoin (BTC) fell by more than 3% at the start of Asian trading hours. This drop was due to a wider stock market decline and weakening sentiment for risk assets like cryptocurrencies.
During the beginning of Tokyo trading, BTC fell sharply from over $65,500 to nearly $64,000 within minutes. This sudden decrease caused over $250 million in bullish bets to be liquidated, marking the worst instance since early July.
Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This information is useful for traders as it indicates that leverage is being cleared from popular futures products, serving as a short-term signal of a decrease in price volatility.
Ether (ETH) long positions suffered the most, with $100 million liquidated due to a 7.5% decline. This fall was driven by outflows from the newly launched ETH ETF.
Among exchanges, Binance experienced the highest liquidations at $118 million, with 88% of these being long trades. OKX and HTX, which are popular among Asia-based traders, saw up to 94% of long trades on their exchanges liquidated.
The plunge in Bitcoin prices coincided with a significant drop in U.S. technology stocks on Wednesday. The Nasdaq 100 index, which is heavily weighted with tech stocks, lost 660 points, its biggest drop since 2022.
Mixed quarterly earnings reports from Google parent Alphabet (GOOG) and Tesla (TSLA) caused their shares to close down by as much as 12% on Wednesday. The so-called “Magnificent 7” tech stocks collectively lost over $750 billion in market cap on Wednesday, the highest loss on record for the group.
The losses continued to spread to Asian markets early Thursday. Japan’s Nikkei 225 index fell by more than 3%, amid concerns that the Bank of Japan might increase interest rates. These developments contributed to the overall decline in market sentiment and impacted the performance of cryptocurrencies and other risk assets.
