The world’s leading cryptocurrency surged to $64,000 on Wednesday before swiftly retreating to $59,000, according to KRYZA data. Bitcoin’s rapid ascent came to an abrupt halt early Wednesday afternoon, with its price plummeting 7% from its $64,000 peak, resulting in significant losses for leveraged traders.
BTC had surged earlier in the day, surpassing the $60,000 mark for the first time since November 2021. After peaking at $64,037, it sharply dropped to $59,400, as indicated by the CoinDesk Bitcoin Index (XBX). Although it briefly rebounded above $61,000, another wave of selling pressure pushed it back down to near the same level. At the time of reporting, BTC was trading at $61,122.
The sell-off reverberated across the broader digital assets market, with the CoinDesk 20 Index (CD20) plummeting nearly 5% after reaching a new all-time high of 2,260 earlier on Wednesday. Major cryptocurrencies within the CD20, including ether (ETH), Solana’s SOL, XRP, Cardano’s ADA, dogecoin (DOGE), and Avalanche’s AVAX, also experienced declines ranging from 4% to 9% within an hour.
Crypto Leverage Liquidations The sudden price drop resulted in a total of $700 million in liquidations across all digital assets in the past 24 hours, as leveraged derivatives trading positions were liquidated, according to CoinGlass data.
Liquidations occur when an exchange closes a leveraged trading position due to a partial or total loss of the trader’s initial margin. This happens if the trader fails to meet margin requirements or lacks sufficient funds to maintain the trade.
Wednesday’s events likely marked the largest wipe-out since last August, when a sudden drop in bitcoin to $25,000 liquidated $1 billion worth of derivatives positions across all crypto assets. The liquidations affected both long (bullish) and short (bearish) positions as cryptocurrency prices surged and then plummeted. Record-breaking Spot Bitcoin ETF Volumes Wednesday’s volatile price action also led to record trading volumes for U.S.-listed spot bitcoin exchange-traded funds (ETFs). BlackRock’s IBIT saw $3.3 billion worth of shares traded, more than doubling Tuesday’s record-breaking volume. In total, the spot ETFs collectively recorded nearly $8 billion in trading volume, as noted by Eric Balchunas, senior ETF analyst at Bloomberg Intelligence. Meanwhile, amid the digital asset market’s turbulence, some Coinbase users were surprised to find zero balances in their exchange accounts. The company has since resolved the issue for some users.
