Bitcoin Flash Crash to $90k Wipes Out Over $1 Billion in Leveraged Positions

• Bitcoin surged to US$103,900, fell to US$90,400 overnight, and then recovered to US$97,898.
• In the last 24 hours, total liquidations reached US$1.04 billion, with US$578.6 million from Bitcoin alone.
• Market volatility is high, evidenced by a drop in the Fear and Greed Index from 84 to 72.
• Analysts see potential for broader Bitcoin adoption, influenced by market dynamics and regulatory developments.

Following yesterday’s surge to US$103,900 (AU$161,727), Bitcoin took a breather, falling as low as US$90,400 (AU$140,707) in overnight trading. Bulls have since stepped in and bought the dip, causing the price to climb back to US$97,898 (AU$152,287) at the time of writing.

As per Coinglass, total liquidations in the past 24 hours across long and short positions come in at US$1.04 billion (AU$1.61 billion).

Related: Ethereum ETFs Surge with Robust Inflows, Signalling Market Turnaround

There have been US$578.6 million (AU$899.46 million) in Bitcoin liquidations alone, with long positions the most affected. In total US$427.48 million (AU$664.54 million) in Bitcoin long positions and US$151.19 million (AU$235.03 million) in short positions were liquidated.

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There is definitely a lot of volatility in the market right now, so these figures are accurate at the time of writing but can change quickly. The Fear and Greed Index also dropped from 84 (Extreme Greed) to 72 (Greed), a substantial change, indicating that investors are more cautious.

Kaiko: “Crypto’s Fragmented Markets Require Crypto-Tailored Aggregation Methodologies”

A report by analysts at Kaiko highlights the increased volatility, attributing this to Bitcoin’s sudden move past US$100k.

They also noted a huge deviation between prices on exchanges at the time, saying “prices diverged widely across exchanges, with Crypto.com leading the way as the first to hit $100k”.

On Kraken, BTC-USD remained capped at $100k for 10 minutes, while on Bitstamp and on Coinbase it was exceeded [sic] $100,400. These variations can be attributed to limit orders, market makers stabilizing volatility, and recurring market patterns.

Kaiko

Kaiko analysts said these fragmented markets need tailored ways for traders to determine fair value, which is also important for “regulatory compliance and reporting”.

They believe Europe’s MiCA and the DAC8 and CARF frameworks are a step in the right direction, although they’re just a start as “addressing challenges like fragmentation and volatility remains crucial”.

Bitcoin Rally Could Trigger Wider Adoption: Analysts

According to Bloomberg analysts, there could be a tipping point reached soon that would send BTC much higher. Bloomberg Intelligence analyst Eric Balchunas said mainstream crypto adoption may be an upward spiralling event.

There could come a point where advisers decide ‘I should have it to avoid getting fired’ versus ‘I don’t want to buy it and get my client mad for having some dumb bitcoin ETF’.

Eric Balchunas, Bloomberg

In simple terms, Balchunas thinks that advisers to wealthy clients may soon not be able to not recommend Bitcoin in a balanced portfolio any longer.

Related: XRP Dips, Analyst Says Momentum Will Continue as Altseason Picks Up Steam

Although highly speculative, it’s quite possible that we’re about to see adoption on a much larger than expected scale and ultimately the price of BTC could go much higher as a consequence.