Bitcoin flash crashes by $2K in 5 minutes, liquidating $600M in longs

Bitcoin flash crashes by $2K in 5 minutes, liquidating $600M in longs

Bitcoin (BTC) fell more than $2,000 in five minutes on March 31, when a wave of volatility disrupted the calm market.

1 minute candlestick chart BTC/USD (Bitstamp). Source: View of the shop

Bitcoin flash crashes by $2K in 5 minutes, liquidating $600M in longs

BTC experiences sudden volatility

Cointelegraph Markets Pro and Tradingview showed the nightmare for long traders that occurred on Wednesday, when BTC/USD suddenly dropped from $59,350 to $57,000.

At the time of writing, losses were still piling up after the pair hit a low of $56,713 on Bitstamp.

This is Bitcoin trader Michael van de Poppe responding to what has become a known event for Bitcoin on short time scales.

Earlier in the day, traders focused on the uptrend, with PayPal news prompting a rise to just below $60,000.

Those betting on the continuation of the bull market lost heavily Wednesday, however, as the drop wiped out $600 million in long positions amid outflows totaling $1 billion over the past 24 hours.

For quantitative analyst PlanB, however, their demise has been beneficial, as the market is now freed from unwanted leverage and there will be more organic gains in the future. As reported by Cointelegraph, long and short positions have seen similar movements in recent months.

A good end to the hunt for loss…. Again, he responded on Twitter.

With all leverage lengths eliminated, we finally have a chance to break through the $60,000 mark in April.

Increase in subsidy rates

Meanwhile, there are signs that a further rise in the bitcoin price will require some effort.

Refinancing rates on derivatives rose to 0.375% at Huobi that day, a classic sign of downward pressure.

Graph of bitcoin financing rates at BTC/USD. Source: Bybt

Bitcoin flash crashes by $2K in 5 minutes, liquidating $600M in longs

In the long term, the picture remains more than positive. Analysts see the next hurdles at $68,000 and $73,000.

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