- Over $130 million in Bitcoin shorts were liquidated as Bitcoin reclaimed $10,000.
- Within an hour Bitcoin rose over $600.
Today Bitcoin reclaimed the $10,000 level as the crypto surged over $600 in under an hour. However, this price surge is not all good news. According to cryptometer.io, over a $130 million worth of Bitcoin shorts were liquidated in the last 24-hours on BitMEX, a major crypto derivatives exchange.
Many traders with Bitcoin shorts were greeted with liquidation notices as the crypto surged in a short period of time. Bitcoin shorts allow traders to bet against Bitcoin’s price rising. If Bitcoin’s price declines traders can close their position and make a profit. However, if the price rises, the value of the position will decline. In addition, many traders utilize leverage and margin trading. For example on a 10x leverage, gains and losses are both amplified 10x. While 10x leverage offers room for some price volatility, many exchanges offer far greater leverage options, where a price change of only a few percent can result in liquidations and traders losing their entire position.
The largest cryptocurrency has seen immense volatility in 2020. After opening the year at just over $7,000, Bitcoin rose past $10,000 before crashing over 50% in 24-hours. The crash was later dubbed as “Black Thursday”. Following the crash, the cryptocurrency rose as the Bitcoin halving neared.
Following the Bitcoin halving event, the market sentiment began to die off as discussed by Johnson Xu (Chief Analyst at TokenInsight), evident by Bitcoin’s slowly declining price. However, it seems that the sentiment is recovering as the popular crypto reclaims $10,000.
Just last week Bitcoin made another move past the $9,000 level. This triggered a wave of Bitcoin short liquidations. However, Bitcoin’s quick surge past the psychological $10,000 level triggered an even more massive wave of liquidations dwarfing the rise past $9,000.
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