Crypto Market Hit: Bitcoin Falls to $64K Due to U.S. Tech Rout, $250M Long Positions Liquidated
Crypto Market Hit– Bitcoin (BTC) plummeted over 3% as Asian trading began, triggered by a broader stock market decline and waning confidence in riskier assets like cryptocurrencies. BTC swiftly dropped from above $65,500 to nearly $64,000 during Tokyo trading, resulting in the liquidation of over $250 million in bullish bets, marking the largest since early July.
Liquidations occur when exchanges forcibly close leveraged positions due to traders losing their initial margin. This data is crucial for traders as it signals the reduction of leverage in popular futures products, suggesting a short-term decrease in price volatility.
Bitcoin Nosedive Amid Stock Market Rout
The CoinDesk 20 (CD20), which tracks major tokens excluding stablecoins, fell by 3.3%. Ether (ETH) saw significant losses of $100 million in long positions, driven by a 7.5% decline amid outflows from the newly introduced ETH ETF.
Binance reported the highest liquidations at $118 million, with 88% of these being long trades. OKX and Huobi, favored by Asian traders, saw up to 94% of long positions liquidated on their platforms.
The plunge coincided with a downturn in U.S. tech stocks on Wednesday, with the Nasdaq 100 plummeting 660 points, its steepest decline since 2022. Mixed earnings from Google (GOOG) and Tesla (TSLA) saw their shares drop as much as 12%, contributing to a collective loss of over $750 billion in market capitalization for the Magnificent 7 tech stocks, a record for the group.
Losses extended into Asian markets on Thursday, with Japan’s Nikkei 225 falling over 3% amid fears of potential interest rate hikes by the Bank of Japan.
FAQs
Why did Bitcoin drop to $64,000?
Bitcoin experienced a drop to $64,000 primarily due to a broader decline in the stock market and weakening sentiment towards risk assets like cryptocurrencies. A sudden sell-off pushed Bitcoin from over $65,500 to nearly $64,000 within minutes, leading to the liquidation of $250 million worth of long positions.
What does liquidation of long bets mean?
Liquidation of long bets occurs when an exchange forcibly closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It indicates the removal of leverage from the market for leveraged products and typically signals a short-term decrease in price volatility.
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