- Bitcoin experienced a sudden 5% price drop on Tuesday, resulting in over $165 million in losses for traders with leveraged exposure to cryptocurrencies within two hours.
- The drawdown also coincided with net outflows of $86 million from bitcoin exchange-traded funds (ETFs), with Grayscale’s GBTC seeing the largest outflow of $302 million, while BlackRock’s ETF attracted the highest inflows of $165.9 million.
Leverage traders are nursing losses of over $165 million, as the price of bitcoin tumbled 5%.
The sharp decline of cryptocurrency price on Tuesday
The cryptocurrency market witnessed a significant downturn on Tuesday, sending shockwaves through the trading community as bitcoin plummeted by 5% within just 30 minutes. Traders with leveraged exposure to bitcoin and other digital assets found themselves grappling with losses totaling over $165 million in less than two hours.
Data from Coinglass revealed that the sharp decline in bitcoin’s price wiped out more than $165 million in leveraged positions, with significant losses incurred in bitcoin and Ether’s long positions. Bitcoin longs saw over $50 million evaporate, while Ether longs accounted for more than $40 million of the total losses. Additionally, long positions on Dogecoin and Solana’s SOL also suffered liquidations, albeit to a lesser extent compared to bitcoin and Ether.
Also read: Bitcoin rose and then dumped to a 10-day low last week
Be alert to the turbulence cryptocurrency market
Around the same time as the drawdown, bitcoin exchange-traded funds (ETFs) posted a net outflow of $86 million, breaking a four-day positive inflow streak, per FarSide data.
BlackRock’s ETF stood as the best-performing fund, whose net inflows reached $165.9 million, while Fidelity came in second with $44 million.
However, the inflows were weighed down by Grayscale’s GBTC posting $302 million in outflows, bringing the net daily outflows for all the funds to $85.7 million.
The sudden market turbulence underscores the volatility inherent in the cryptocurrency space, where rapid price swings can lead to substantial gains or losses for investors. As bitcoin continues to dominate the market, its price movements have a ripple effect on the broader cryptocurrency ecosystem, impacting not only individual traders but also institutional investors and ETFs.
