- Exchanges forcibly closed “longs” for $62 million
- The situation worsens amid rumors about the bankruptcy of Silvergate Capital
- BTC rate fell by almost 5% on Friday
According to the analytical portal Glassnode, on the morning of Friday, March 3, exchanges liquidated long (bullish) BTC futures for more than $62 million. was in August last year.
Recall that the term “liquidation” means that the trader’s position was closed due to the loss of margin, in whole or in part. Today, March 3, the exchanges closed longs for $62 million and shorts for $500,000.
Such a drawdown is a normal movement. Since January 1, we have only a pump and strong overbought. The fair price for bitcoin today is about 20 thousand. Half of Twitter thinks so. This fall is not news, but technical. Having pushed the price to 22 thousand for the first time, they began to feed the crowd that the Asians would now come in and the market would grow. But the Asians are here even earlier than Satoshi himself, and I think that for them this is just an excuse to cash in legally.
In total, the entire market has been in longs since January 1, densely entered at 24-25 thousand. The only thing that is symbolic is that this candle was fired in the Asian session, but there are such accumulations with stops that this is just a domino effect. At the same time, this is still a small move, if they don’t pause now so that people get more longs, then we can continue a good movement on liquidations, without news. But then people themselves will find news to their rash purchases.
The prevalence of long positions over short ones means that the leverage has been shifted towards the bulls. This means that most of the traders were determined to increase prices.
Forced liquidation of positions is often a sign of impending market turbulence. In fact, this is a forced step of the exchanges to minimize losses.
What do we have in practice? Most traders expected price increases. This is not surprising given the “January rally” of BTC. Then the volatility of the market increases, the exchanges forcibly close positions. Therefore, the situation is about to get worse.
What is the reason for this? First of all, the crisis around Silvergate. The bank’s statement about the “assessment of the ability to continue operations”, read bankruptcy admission, only added to the panic.
Against this background, the BTC rate has decreased by 4.73% over the past day (to $22,359). And given that the big “players” have severed ties with Silvergate, this is not the last push down.
