Bitcoin News

Bitcoin Long Liquidations Hit Highest Level Since August

The futures market was shaken out of its bullish leverage by the early Friday drop in Bitcoin’s (BTC) price. This drop was caused by worries over the cryptocurrency-friendly bank Silvergate (SI).

According to statistics provided by Glassnode, during the Asian hours, exchanges liquidated longs or bullish bitcoin futures for a total of over $62 million. This number represents the greatest amount since August. There were also short liquidations that totaled little more than half a million dollars. Liquidation takes place when a trader’s bullish or bearish wager is destroyed by a movement in the market that leaves them with inadequate cash to maintain an open position in a leveraged transaction.

The prevalence of long liquidations is evidence that leverage was tilted toward the bullish side, which indicates that the vast majority of market participants were positioned for a price increase. According to statistics provided by CoinDesk, the value of Bitcoin, the most valuable cryptocurrency based on market value, dropped by more than 5 percent to $22,000, marking its lowest point since February 14.

On Thursday, shares of cryptocurrency-friendly lender Silvergate dropped by half after the company said that it is examining “its ability to continue as a going concern” and postponed publishing its annual report with the Securities and Exchange Commission (SEC).

The delayed response of Bitcoin to the news about Silverage may have been caused by concerns that the problem at the bank that is known to assist money transfers between exchanges and other market players may cause the liquidity bottleneck in the cryptocurrency market to become much worse.

On Thursday, most exchanges declared that they would be suspending commercial operations related to Silvergate.


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