Before the traditional market opened for trading on Monday, Bitcoin and Ethereum prices fell throughout the weekend, liquidating $1.1 billion in leveraged orders.
At 5 pm (CST) on Sunday, the CME futures market opened with a drop of $4,000, since it closed at $29,385 before the December 31 holiday.
Over the weekend, Bitcoin broke through $30,000 for the first time and reached $34,800 this morning. However, as the price of BTC dropped by 20% at around 1:00 AM CST, the speed of correction was also very fast.
As the second largest cryptocurrency broke through $1,150 for the first time in three years, Ethereum’s volatility is even greater. However, the price of Ethereum corrected 23% to $900 after reaching its peak of $1,170.
In exchanges like Binance and Huobi, more than $1.1 billion has been liquidated in the past four hours, of which Bitcoin longs accounted for nearly 93.6%.
The standard for the Bitcoin bull market is a 30-40% correction, and it is rare to use excessively leveraged longs on these platforms.
For example, even after the decline, the interest rate of Ethereum financing on BitMEX is close to 474% per year. Similarly, for Bitcoin, the fund utilization rate is above 70% every year. In addition, after the CME gap is filled, the rapid recovery above $30,000 is considered a strong bullish signal.
Although the bullish sentiment does not seem to affect the bullish market sentiment, the high financing rate of long-term orders in the futures market may become a catalyst for further correction. Today’s low of approximately $27,750 will provide support for the positive trend.
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Post time: Jan-05-2021
