Over 150 million dollars worth of bitcoin long positions were liquidated today on Bitmex, the most seen in 2020 so far. Many of the liquidated positions were highly leveraged longs banking on bullish sentiment surrounding the upcoming BTC halving.
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$150mln+ liquidations on BitMEX today – highest in 2020 pic.twitter.com/WO7aKyNhcI
— skew (@skewdotcom) February 26, 2020
Traders on BitMEX, the largest volume Bitcoin derivatives trading exchange, are feeling the pain and reeling from a huge Bitcoin price dump today. The flagship crypto has fallen from a daily high of $9368 to a low of $8580.
Currently, Bitcoin price has bounced back a little bit, to where it sits now at $8,715 at the time of writing. Bitcoin has broken through a critical support of $8800, and may see further downside price action.
The 150 million dollars which changed hands on BitMEX, represents the largest single day liquidations on the exchange for the entire year. Many suspect whales to be hunting stops to snag easy money from over-leveraged long positions, before continuing the uptrend to $11,000.
If Bitcoin support doesn’t hold, we may test the strong support at $8,000. If price manages to break this threshold, the bullish momentum may be dead in its tracks, and a bearish sentiment may overtake the market prior to the highly anticipated halving event.
Bitcoin has dropped 14% in the last three days, although in the bullish run up to the prior halving we had a couple corrections of more than 40%, to put things in perspective. This means this could be a healthy correction, before heading towards new yearly highs.
Bitcoin in the grip of bearish traders
On higher time frame charts, both the monthly and weekly have flipped bearish, despite a promising golden crossover on the daily. This means this could be more than a simple correction, before another strong bounce to the upside.
Bitcoin’s critical resistance of $8,000 must hold in order for the positive momentum to stay intact, and for a strong bullish bounce to occur. It is unclear if this decline in price is linked to the bearish sentiment towards the macro picture of the global economy overall. The S&P 500 has also been bearish, down $2.1 trillion this week.
Many investors have been expressing concerns over disruption of supply chain and manufacturing in China due to the spread of the coronavirus. Many Chinese manufacturers and companies have been shut for weeks during the quarantines to fight the disease.
They have expressed concerns over meeting payroll, workers have not received wages, or even been able to work at all. There is no real estimate for the negative impact these developments may be having on the world’s economy. Global pandemics are a black swan event that have little historical precedence for investment markets. We may have not even begun to see the real impact, yet.
Do you think bearish sentiment in the traditional economy is having a negative effect on crypto markets? Let us know in the comments!
Images via Shutterstock, Twitter @skewdotcom
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