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Bad News for Bitcoin Bears: ETF News Caused $221 Million Loss in Liquidations

Published October 24, 2023 1:39 PM
Teuta Franjkovic
Published October 24, 2023 1:39 PM

Key Takeaways

  • Bitcoin’s surge past $35,000 triggered nearly $221 million in liquidations.
  • This incident underscores digital asset unpredictability, leading to liquidations in both long and short positions.

The cryptocurrency market has seen a flurry of liquidations due to a notable increase in Bitcoin’s value , emphasizing the significant volatility of the digital asset space.

According to the statistics, Bitcoin crossed the $35,000 mark, sparking a chain reaction of liquidations worth almost $221 million. The $400 million in liquidations seen in the past 24 hours across the whole market for digital currencies can be attributed in large part to this incident.

Value Surge Bet

About $300 million of these liquidations were primarily attributed to the short side. This suggests that many bets on Bitcoin’s value declining rather than climbing have been closed.

Bears are in charge of 99% of liquidations on BitMEX . On the previous day, dealers of Bitcoin (BTC) lost $224 million, while owners of Ethereum (ETH) suffered losses of $60 million. When a trader fails to meet margin requirements or does not have sufficient funds to keep their positions open, the exchange will liquidate their leveraged position for them.

Bitcoin Liquidations Spike Amid Spot ETF Excitement

The analysts largely attribute these liquidations to the excitement surrounding the Bitcoin (BTC) spot ETFs that are awaiting approval from the U.S. SEC. The legal dispute was resolved last night when the court issued a directive for the Grayscale/SEC procedure. Grayscale can consider this outcome a victory, although its application for a spot ETF has not yet been approved.

The founder of BitMEX, Arthur Hayes, emphasizes that this run may begin a bullish phase.

Hayes further stated that Bitcoin is once more being used as a safe haven in the midst of the continually rising inflation of the major foreign currencies.

The crypto community experienced extreme joy following BTC’s rise to $34,400. The “Greed” zone of Alternative’s Fear and Greed Index  soared to 66/100.

According to data , this indicator is at its most “overheated” level since April 17, 2023. The index increased by over 25% over the previous seven days.

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