{"id":120826,"date":"2020-11-26T13:35:29","date_gmt":"2020-11-26T10:35:29","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/how-massive-liquidations-caused-bitcoin-to-plummet-16-in-24-hours\/"},"modified":"2020-11-26T13:35:29","modified_gmt":"2020-11-26T10:35:29","slug":"how-massive-liquidations-caused-bitcoin-to-plummet-16-in-24-hours","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/how-massive-liquidations-caused-bitcoin-to-plummet-16-in-24-hours\/","title":{"rendered":"# How massive liquidations caused Bitcoin to plummet 16% in 24 hours"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a26e11bb778f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a26e11bb778f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/how-massive-liquidations-caused-bitcoin-to-plummet-16-in-24-hours\/#What_triggered_the_cascade_of_liquidations\" >What triggered the cascade of liquidations?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/how-massive-liquidations-caused-bitcoin-to-plummet-16-in-24-hours\/#What_happens_now\" >What happens now?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># How massive liquidations caused Bitcoin to plummet 16% in 24 hours <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>Bitcoin (BTC) price fell by a whopping 16% to $16,334 on Nov. 26 since achieving its peak at $19,484 the previous day. Data suggests that cascading liquidations were the driving force of the massive correction.<\/p>\n<p>Prior to the pullback, the open interest of the Bitcoin futures market hit a new record high. The derivatives market was also overheated with buyers, causing the market to sway to one side.<\/p>\n<figure><img loading=\"lazy\" decoding=\"async\" width=\"1229\" height=\"796\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2020-11\/95179fa1-f4ac-4247-89b7-a225a634e965.png\"><figcaption style=\"text-align: center;\"><em>BTC futures volumes. Source: Cointelegraph Markets, Digital Assets Data<\/em><\/figcaption><\/figure>\n<p>The combination of two factors triggered a rapid BTC price drop alongside a spike in futures trading volumes.<\/p>\n<p>Over a billion dollars worth of futures contracts were liquidated, similar to the March 12 crash. The CME, for example, saw $1.8 billion in volume, its highest ever, <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/skewdotcom\/status\/1331524230131933189?s=20\">according<\/a> to Skew.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_triggered_the_cascade_of_liquidations\"><\/span>What triggered the cascade of liquidations?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As the price of Bitcoin started to drop, inflows into exchanges spiked. This indicates that whales, or high-net-worth investors, were selling heavily on major exchanges, including Coinbase.<\/p>\n<figure><img loading=\"lazy\" decoding=\"async\" width=\"2694\" height=\"1352\" alt=\"\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2020-11\/e5060874-10e6-4b20-87cc-123fafd4b61e.jpg\" title=\"\"><figcaption style=\"text-align: center;\"><em>All Bitcoin Exchange Inflow Mean. Source: CryptoQuant<\/em><\/figcaption><\/figure>\n<p>Ki Young Ju, the CEO of CryptoQuant, <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/ki_young_ju\/status\/1331815316838486016\">pointed out<\/a> that the All Exchanges Inflow Mean indicator was showing the selling pressuring coming from whales.<\/p>\n<p>Initially, the sell-off from whales caused the price of Bitcoin to drop to around $18,000. But, because there were likely a large number of overleveraged long contracts, it led to a massive long squeeze.<\/p>\n<p>Within several hours, Bitcoin declined to as low as $16,334, posting a March-esque crash. <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/lawmaster\/status\/1331882161427914753?s=20\">Data suggests<\/a> that nearly $1.9 billion worth of futures contracts were liquidated on the day.<\/p>\n<p>According to Glassnode, an on-chain market data analysis firm, Binance Futures saw the largest spikes in liquidations of $425 million in just two hours at 3 am and 8 am UTC.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">Hourly liquidations of long positions on <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/Binance?src=hash&amp;ref_src=twsrc%5Etfw\">#Binance<\/a>:<\/p>\n<p>&#8211; $262M at 3am UTC<br \/>&#8211; $163M at 8am UTC<a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw\">#Bitcoin<\/a> <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/t.co\/iVmD4TXCpZ\">pic.twitter.com\/iVmD4TXCpZ<\/a><\/p>\n<p>\u2014 glassnode (@glassnode) <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/glassnode\/status\/1331888647298306048?ref_src=twsrc%5Etfw\">November 26, 2020<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Massive price swings following a minor initial pullback were largely expected because of the high funding rates. The market has been overwhelmingly long or buying BTC since early November, which increased the risk of a sharp BTC correction.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_happens_now\"><\/span>What happens now?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Order books of major exchanges were obliterated and as a result, the cryptocurrency market saw a massive short-term correction.<\/p>\n<p>There are three potential scenarios for Bitcoin in the near term. First, it could recover relatively quickly to $18,000. Second, it could continue declining to the next major support area at $13,700. Third, it could range, allowing the derivatives market to stabilize.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<p>But, there is one concerning metric. Glassnode found that the number of Bitcoin whales has hit a new all-time high.<\/p>\n<p>This means that there is still large potential selling pressure that could come from high-net-worth investors. The analysts at Glassnode <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/twitter.com\/glassnode\/status\/1331630527959470080\">said<\/a> on Nov. 25:<\/p>\n<blockquote><p>\u201cThe number of #Bitcoin whales (entities holding at least 1,000 $BTC) has reached a new ATH after more than 4 years. An entity is a cluster of network addresses controlled by the same individual\/institution.\u201d<\/p><\/blockquote>\n<div class=\"post-promo-widget\"><a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/shop.ledger.com\/pages\/black-friday?utm_source=cointelegraph&amp;utm_medium=cpm&amp;utm_campaign=black_friday&amp;utm_content=button_article\">Ledger hardware wallets 40% off<\/a><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener noreferrer\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/how-massive-liquidations-caused-bitcoin-to-plummet-16-in-24-hours\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# How massive liquidations caused Bitcoin to plummet 16% in 24 hours &#8221; Bitcoin (BTC) price fell by a whopping 16% to $16,334 on Nov. 26 since achieving its peak at $19,484 the previous day. Data suggests that cascading liquidations were the driving force of the massive correction. Prior to the pullback, the open interest&#8230;<\/p>\n","protected":false},"author":1,"featured_media":120827,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2020-11\/1b6a85e2-e97f-459b-b202-7d3de50165e9.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74972,74937,74939,73785],"class_list":["post-120826","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-futures","tag-bitcoin-price","tag-market-analysis","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/120826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=120826"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/120826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/120827"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=120826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=120826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=120826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}