Bitcoin falls 10% in three hours following Matrixport proclamation
Bitcoin fell about 10% three hours earlier yesterday, but market data sheds some light on this unexpected change of direction.
Bitcoin (BTC) is trading at just over $42,300 after seeing a price decrease of about 7.4% over the last 24 hours. Earlier today, the price quickly fell from about $45,500 to $40,800 — a loss of over 10% in under three hours.
CoinGlass data shows that Bitcoin has seen $2.7 million of one-hour-long liquidations, $116 million of 4-hour-long liquidations, and $129 million of 24-hour-long liquidations. Crypto investor Scott Melker suggested that this price downturn is a “leverage flush” that eliminated the overleveraged positions.
When a market has a significant amount of highly leveraged positions, a small downturn can result in the liquidation and forced sale of many assets. This forced sale then causes further price decreases that cause even more liquidations in a cycle that repeats until a “leverage flush” comes to fruition.
