Bitcoin bearish rally causes liquidations of more than USD 2 billion

The bitcoin (BTC) market recorded the largest sales volume since March 2020 on Thursday, while its price found support at USD 25,000, before rebounding above $28,000. On the other hand, BTC settlements in the last 24 hours reach USD 2.2 billion, according to CoinGlass figures.

BTC inventories on exchanges are growing. Source: CryptoQuant.

The growing sales of recent days are reflected in the BTC inventories on the exchanges, which have been increasing, as can be seen in the following graph. They have gone from a minimum of 2.4 million BTC, last April 22 to 2.51 million BTC last Tuesday, May 10, according to a data from CryptoQuant. In total, more than 37,000 BTC entered the exchanges in that period, which is equivalent to USD 1.443 billion.

The whales entered the capitulation phase, to a lesser extent than in March 2020. Source: Glassnode.

Another aspect of the incoming flows can be seen in the following graph. The volume of BTC transfer in the hands of the “whales” to the exchanges is the largest since March 2020.

BTC liquidations grow

As the price decreases, the liquidations begin to increase amid the panic that has taken the market. The chart below shows the liquidations in the last 24 hours, dominated by short positions. These consist of traders’ bets that the price will fall, while long positions are held with the expectation of an increase in prices.

Liquidations of BTC positions in long (green) and short (red). Source: CoinGlass.

Liquidations increased more than 150% in the last 24 hours. As a result of the capitulations, they reached 2,242 million dollars, in which a predominance of short positions can be seen.

Bitcoin price recorded a rebound at the $25,000 mark. Source: TradingView.

This means that in the midst of the price collapse, traders bet more on a decline to levels below $25,000, which is the low of this Thursday. The subsequent price rally, however, it led to the liquidation of those bearish positions.

After reaching the support level at USD 30,000, as reported by Criptonews at the beginning of the week, the BTC price has continued with a predominantly bearish trend. In an analysis of this medium, published this Thursday, the 12th, the collapse of Luna and Terra USD is pointed out as one of the causes of the price retracement of both BTC and the cryptocurrency market as a whole.

On the other hand, the global geopolitical situation also slows down the momentum of the markets, largely due to the prospects for future measures by the Fed to try to contain inflation. After fluctuating for a week around USD 40,000, the price of bitcoin lost that support at the end of April, and accentuated its decreasing trend following the increase in interest rates by the Fed in early May, as reported by Criptonews.