Bitcoin Price Correction Leads to $296 Million in Liquidations: Will BTC Reach New All-Time High?
In the past 24 hours, Bitcoin (BTC) has experienced significant volatility, dropping to a low of $68,830 on the Binance crypto exchange before staging a recovery. Despite trading near its all-time high (ATH) of $73,737, this sudden price dip has raised concerns about BTC's ability to achieve a new ATH in the near future.
Data from CoinGlass, a crypto liquidations tracker, reveals that over $296 million in active positions were liquidated within this timeframe. A staggering 77% of these liquidations were long positions, indicating that many traders were betting on Bitcoin's continued upward trajectory. The highest liquidations occurred on Binance, totaling $124 million, followed by OKX with $74 million and Bybit with $65 million.
In terms of digital asset liquidations, Bitcoin led the pack with over $97 million, while Ethereum (ETH) saw $47 million liquidated, and Solana experienced nearly $17 million in liquidations.
The recent downturn has also impacted the total cryptocurrency market capitalization, which has decreased by approximately 3.5%, now valued at $2.48 trillion. While Bitcoin is nearing its ATH, the overall crypto market cap remains significantly below its peak of $2.98 trillion recorded in November 2021.
This disparity between Bitcoin's performance and the overall market cap suggests that altcoins have not kept pace with Bitcoin's recent gains, reflecting a cautious investor sentiment that favors BTC over altcoins during uncertain market conditions. However, this also indicates potential growth opportunities for altcoins, enticing risk-seeking investors to consider accumulating them for potential extraordinary returns compared to Bitcoin.
Currently, Bitcoin dominance, which measures BTC's share of the total crypto market cap, is steadily approaching 60%. A rise in Bitcoin dominance could pose challenges for altcoins that are already lagging behind BTC in price movements.
Crypto enthusiasts are left wondering if Bitcoin will reach a new ATH during this rally. Several factors could support this possibility, including the potential election of pro-crypto US presidential candidate Donald Trump, the effects of Bitcoin halving, increased inflows into Bitcoin exchange-traded funds (ETFs), and a favorable low interest rate environment.
Conversely, sentiment indicators such as the Fear and Greed Index suggest that the market is currently in a 'greed' phase, indicating that further market corrections may occur before the next upward movement.
Regardless of the outcome, the cryptocurrency market is expected to remain volatile in the coming days. However, long-term Bitcoin holders seem unfazed by this volatility, as profit-taking has been relatively subdued even when Bitcoin surpassed the $71,000 mark.
As of now, Bitcoin is trading at $71,524, reflecting a modest increase of 0.6% over the past 24 hours, with a reported market cap of $1.41 trillion.