Bitcoin liquidations have hit three-year records as a fresh BTC price dump takes the market to a popular target.
New research from X account Ltrd reveals “crazy” trader behavior while the total crypto market cap shed up to 11% on Dec. 9.
Analysis: Coinbase traders sold Bitcoin “aggressively”
Bitcoin (BTC) fulfilled expectations during the week’s first Wall Street trading session, dipping to near $94,000.
This constituted around 50% of a large downside wick from Dec. 5 — one that had created a market “inefficiency” that had a 96% chance of being filled, analysis said.
While this came true, the liquidations accompanying the price drop looked a little like last week’s cascade.
“Today’s dump resulted in the biggest liquidation since 2021,” Ltrd summarized.
BTC/USD chart with market impacts. Source: Ltrd/X
Analyzing exchange movements, Ltrd revealed that the largest United States trading platform, Coinbase, was pivotal in sparking downward momentum.
“We observed something crazy — Coinbase traders began selling aggressively almost an hour before the mega dump,” it said.
“Of course, the biggest drop was triggered by a liquidation cascade, but this constant selling pressure was crucial in pushing the price into a region where overleveraged positions were forced to close.”
CVD data for Binance, Coinbase. Source: Ltrd/X
An accompanying chart compares cumulative volume delta (CVD) data for both Coinbase and the largest global exchange, Binance.
“Certainly unusual”
Data from monitoring resource CoinGlass calculates total cross-crypto liquidations at $1.6 billion for the 24 hours to the time of writing on Dec. 10.
Related: Bitcoin price metric ‘bearish since October’ warns analyst amid $10K dip
Of these, BTC longs suffered less than Ether (ETH) longs, with $142 million versus $208 million liquidated, respectively.
“The biggest long liquidation of this bull cycle so far,” CoinGlass confirmed to X followers.
Crypto liquidations (screenshot). Source: CoinGlass
While some reactions bemoaned the “liquidation carnage” affecting altcoins, more optimistic perspectives view this as an opportunity for the market to transition toward more stable conditions.
“With that leverage wiped out, the market has reset, with Altcoins flipping key levels into support. Good stuff,” trader Jelle wrote in part of his latest X commentary.
Ltrd drew attention to the “unusual” nature of the cascade, with altcoins including XRP (XRP) under the microscope.
“Something absolutely strange happened. On a large, relatively mature market, we witnessed a cascade of big sell orders that caused the market to drop by over 5%,” the analysis said.
“We don't know exactly what happened, but it's certainly unusual.”
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