05-06-2022 icon

Traders lose over $403 million as Bitcoin sinks below $36,000

By Lucy Adegbe

The Bitcoin accounts of over 100,000 traders have been liquidated after the largest cryptocurrency based on market capitalization tanked below $36,000 in the Asian early hours.

This development comes just a day after the US Federal Reserve revealed in its new policy that interest rates will be increased by half a percentage point. Bitcoin landed at $36, 211 at the close of the east Asia business day.

The large liquidation took Bitcoin traders by surprise, sinking by almost 8.5% which could be an indication of a bearish market.

The total liquidation is estimated to be around $403 million, with longs estimated to be around 85.40% of this figure while the shorts are believed to be around $58.9 million.

At the time of writing, the price of BTC stands at $35.838 and massive sell-offs are ongoing.

Source: tradingview.com

What you should remember:

  • Liquidation happens when a trader’s leverage position is forcefully closed by an exchange due to the loss of the trader’s initial margin. Simply put, a trader is unable to keep the transaction open due to insufficient funds.
  • In April, crypto experts had expressed worry that the activities of institutional traders, otherwise known as whales, would pull the price of Bitcoin to below $30,000.
  • This development has also affected the crypto market capitalization. The market stands at about $1.64 trillion, down from the $1.7 million support level.