Key Points
- Bitcoin price briefly surpassed $63,000 before settling in the mid $62,000 range, resulting in a surge of liquidations.
- Major altcoins, including SOL and Ethereum, also recorded daily gains.
The price of Bitcoin experienced a short-lived surge above $63,000 in early trading on Thursday, before stabilizing in the mid $62,000 range. This price volatility led to a significant increase in liquidations of leveraged Bitcoin positions.
Price Volatility and Liquidations
The largest digital asset by market cap rose by nearly 6% in the past 24 hours, trading at $62,653 at 4:47 a.m. ET. The price spike led to a significant liquidation of short positions on centralized exchanges. Over $273 million in Bitcoin positions were liquidated, with the majority ($169.50 million) being shorts, as per CoinGlass data.
Other major cryptocurrencies such as SOL, the native coin of the Solana network, and Ethereum also saw daily gains of 16% and 4% respectively. The overall crypto market saw over $388 million of liquidated short positions in the last 24 hours, contributing to a total of $751.33 million in liquidations across various centralized exchanges.
Market Analysis and Projections
Liquidations occur when a trader’s position is forcibly closed due to insufficient funds to cover losses. This happens when market movements are unfavorable to the trader’s position, resulting in the depletion of their initial margin or collateral.
Analysts from Bitfinex have updated their price projection for Bitcoin, predicting that the largest crypto asset could reach a high of between $100,000 and $120,000 by Q4 of 2024. They attribute this to the inauguration of multiple spot Bitcoin ETFs in January, which they believe has introduced “passive demand” for Bitcoin.
Investors are increasingly viewing Bitcoin as a store of value rather than a volatile tradable asset. The GM 30 Index, representing a selection of the top 30 cryptocurrencies, has increased by 5.69% to 133.15 in the past 24 hours.
