Bitcoin (BTC) and Ethereum (ETH) futures have emerged from a period of stagnation, taking on some of the biggest losses seen in over a month as prices fell below support levels in the past two days.
Market Downturn Hits Long Positions in the Crypto Market
Bitcoin experienced one of the biggest two-day price drops since mid-June, falling below $28,500. The weakness in Bitcoin’s price also caused significant drops of up to 5% in leading altcoins such as Ethereum (ETH), XRP (XRP), and Solana (SOL).
Liquidations in futures contracts tracking major altcoins have exceeded $160 million in the past 24 hours, resulting in losses of over $320 million since the beginning of the week. These losses occurred during a period of low volatility for Bitcoin. Investors in Bitcoin futures incurred losses of approximately $50 million, followed by Ethereum with $22 million and Litecoin (LTC) with $5 million. Bitcoin Cash (BCH), Solana, and XRP investors each suffered losses of around $4.5 million.
According to Coinglass data, long positions, which represent the expectation that prices will rise, accounted for 90% of the total liquidations. Liquidation in the crypto market occurs when an investor’s leveraged position is forcibly closed by a cryptocurrency exchange or trading platform due to partial or complete loss of the investor’s initial margin. This happens when an investor fails to meet the margin requirements for a leveraged position or does not have enough funds to keep the position open.
Significant liquidations can indicate the local top or bottom of a price movement, allowing investors to position themselves accordingly. On the other hand, open interest, or the number of outstanding positions, has increased by 1.16%. This suggests that traders have opened more positions but used significantly less leverage.
Downturn Warning from QCP Capital
Crypto trading firm QCP Capital stated in a Telegram broadcast earlier this week that it expects prices to gradually decline, citing the lack of any catalyst to support the market. The company also added that Bitcoin’s price could drop to levels between $24,000 and $26,000 in the coming months.
Current data shows that Bitcoin traded at $28,647, down 1.73% in the past 24 hours. Looking at the price data, the largest cryptocurrency has fallen by 2.87% in the past 7 days and 4.5% in the past 30 days.
