The total liquidation exceeded 500 million magnesium across the network! BTC fell below 93,000 at one point. Why did it suddenly plummet?

Question

BTC once fell below 93,000, and the total amount of Get Liquidated across the network exceeded 500 million dollars

After failing to challenge the 100,000 mark, BTC experienced a pullback of over 5,000 points last night (25th). It fell from a high point near 98,800 to a low point of $92,600, and as of the time of writing, it is quoted at $94,673.

On the other hand, Ethercoin ($ETH) surged yesterday, surpassing $3,500 at one point, but it was not significantly affected by the BTC pullback, with a quote of $3,446 at the time of writing.

CoinGlass data shows that the Get Liquidated amount in the Cryptocurrency leverage contract market reached $530 million in the past 24 hours, with $386 million in long order Get Liquidated and $143 million in short order Get Liquidated.

Image Source: CoinGlass Cryptocurrency Leveraged Contract Market Get Liquidated Situations

Why did BTC suddenly drop? Foreign media analyze 3 major reasons

So why did BTC suddenly experience such dumping? According to mainstream foreign media reports in the crypto world, there are mainly 3 reasons:

High leverage liquidation wave

The recent surge in BTC has far exceeded its daily average level. As the price approaches the $100,000 mark, there has been a lot of profit-taking behavior in the market, dampening the market sentiment.

Source: WincentBTCdaily candlestick and moving average trend

CoinGlass's volume data with major centralized exchanges also shows a significant amount of dumping in the perpetual leverage contract market.

Image source: TRDR.io BTC/USD and BTC/USDT Perptual Futures volume

The forced liquidation caused by Margin Trading is the key reason for the decline of BTC.

Crypto Assets trading company Wincent's senior director Paul Howard stated that BTC encountered significant selling pressure when approaching the $100,000 mark, and it is expected that BTC will consolidate around that area in the near future.

Long-term holder profits are settled.

In addition to forced Close Position caused by leverage Contract Trading, long-term BTC holders (LTH) have also become the driving force behind this dumping.

According to Glassnode's analysis, the average cost base of the LTH group holding for 6 to 12 months is about $57,900, which is far below the current market price. They took advantage of this opportunity to take profit, and the monthly selling pressure has reached 366,000 BTC, the highest level since April this year.

Source: Glassnode BTC long term holder net asset change

Capital Circulation Conversion

"CoinDesk" pointed out that investors are starting to transfer funds to Cryptocurrencies with smaller Market Caps and higher risks.

Arbelos Markets co-founder Joshua Lim observed that recently some Cryptocurrency Hedging funds and family offices have started shifting from BTC to Ethercoin ($ETH). Ethercoin has risen over 4% in the past 24 hours, outperforming BTC.

The cryptocurrency options market has also seen some interesting changes. In the short term, the Ethercoin call options (bullish options) Position is far higher than the put options Position, while BTC Position is mainly concentrated after December 2024.

This means that options traders expect Ethercoin to perform well in the short term, while BTC may not see another uptrend until next year.

BTC short-term pullback, pay attention to market rotation

Paul Howard further pointed out that it is advisable to maintain a neutral attitude towards the market when BTC is in a volatile market, and buying on pullback would be a more reasonable risk-reward strategy.

BTC has been soaring recently, and a certain degree of pullback is a healthy situation. During the oscillation of BTC, Ethercoin is expected to perform even better.

However, in the long run, BTC remains the leader in the cryptocurrency market, but it may experience short-term fluctuations. Investors need to closely follow the capital rotation in the market and adjust their investment portfolios accordingly.

[Disclaimer] The market is risky, and investment should be cautious. The above views are for reference only. Users should refer to more diversified indicators to judge whether to invest, and consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Invest at your own risk.

The entire network was liquidated over 500 million pounds! BTC fell below 93,000 at one point, why did it suddenly drop? This article was first published in 'encryption city'.