Bitcoin faced a modest downturn, dropping to $42,200 in the early Asian session from a recent high of $43,800. Ether, along with most altcoins, also experienced a decline of nearly 5%, reaching $2,230. This dip led to substantial Bitcoin liquidations of long positions on centralized exchanges.
Over $94 Million in Bitcoin Liquidations Amidst Market Volatility
The market’s volatility resulted in the liquidation of more than $94 million in bitcoin positions, with the majority, approximately $85 million, representing long positions.
In addition, the overall cryptocurrency market witnessed a total of $320 million in long positions being liquidated, contributing to a cumulative $360 million in liquidations across various exchanges, as reported by CoinGlass data.
DeFi Liquidations Surge Over $2 Million – A Rare Occurrence
Will Sheehan, founder of data provider Parsec, highlighted a notable surge in DeFi liquidations, exceeding $2 million. Furthermore, this occurrence is significant as it marks the first time in over a year that retail investors have been observed getting leveraged on-chain.
Funding Rates Drop Indicating Reduced Demand for Leveraged Longs
Within derivatives markets, funding rates for major cryptocurrencies, including bitcoin and ether, dropped below +0.01%. This marks a significant decline from the +0.1% observed in recent weeks. Consequently, this decline is indicative of reduced demand for leveraged long positions, according to data from CoinGlass.
Despite the recent market fluctuations, analysts maintain a positive outlook for the cryptocurrency space heading into 2024. Investment management firm VanEck’s experts predict new all-time highs for Bitcoin by the fourth quarter of the coming year.
This optimism is fueled by expectations surrounding the upcoming Bitcoin halving event and the potential launch of a spot bitcoin exchange-traded fund (ETF).