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The crypto currency market has seen a rather hard correction tonight. Bitcoin fell in two hours by $ 3,000 (-6%) and Ethereum by $ 140 (-8%). The week thus began with a rather tough correction, in which long positions worth almost two billion dollars evaporated from the market. After Bitcoin tested a round level of $ 50,000 and Ethereum approached 2,000 in the market, it was rejected. It is quite possible that the correction will continue for a whole week. Some altcoins have made even deeper repairs. Such dogecoin, with the support of Musk's tweets, fell 25% below 5 cents, although it has managed to get back to 6.1 cents in recent hours.
Long pressure in the crypto currency market and the liquidation of $ 1.9 billion
After the upward movements of bitcoin on Friday and Saturday, traders and especially speculators began to open long positions on the lever. The market was oversaturated with orders, and if it continued higher, traders would make huge sums of money. Unfortunately, such quick earnings usually do not work out. Large players with inside information about the market structure began to cut bitcoins. It was enough to move his price by only a few hundred dollars to start closing the first big long positions, which sent the price even lower. This triggered stoplosses and the liquidation of additional positions, leading to the evaporation of $ 1.9 billion from the market.
Trading with leverage carries a huge risk! You better avoid it
We recorded the vast majority of liquidations, almost a billion dollars, on the BINANCE stock exchange. Longy also dropped to the big rungs in Huobi, Bybit or OKEx. Interestingly, liquidations were minimal on the Bitfinex exchange. Open interest on this exchange exceeds one billion dollars, but only 0.3% of all positions have been liquidated. Bitfinex traders seem to be more careful with leverage. Of course, most liquidations came from bitcoin derivatives. The $ 555 million position has disappeared. In the futures market Ethereum it was 336 million. Leveraging is not worthwhile. The cryptocurrency market is volatile in both directions. Using leverage increases profits as well as losses. When you open positions with a lever, you basically borrow money from the stock exchange. And a loan to invest in cryptocurrencies is one of the seven deadly sins. If you don't have many years of experience and you don't know exactly what you are doing, you will almost certainly end up without money.
