Bitcoin dropped more than $ 1,000 in a matter of minutes. The cryptocurrency reached its highest value this year, but suffered massive rejection shortly thereafter.
Bitcoin (BTC) briefly hit its 2020 high of $ 12,071 in the early hours of this morning, before suffering a dramatic rejection.
After rising from $ 11,230 to more than $ 12,000 within 24 hours, Bitcoin was quickly returned to less than $ 11,000, after losing more than $ 1,000 in less than an hour. The cryptocurrency has now recovered somewhat and is currently trading in parallel between $ 11,000 and $ 11,300, with a neutral short-term trend.
Overall, Bitcoin has now dropped more than five percent in the past 24 hours – its first daily loss in more than two weeks. Despite this sudden loss, Bitcoin still performed impressive in the second half of July and still increased by 11% in the last week and 21.9% in the last month.
Bitcoin trading volume has also been rising since the beginning of July and has even doubled from last month. Now, about $ 30 billion in Bitcoin changes hands every day. To put this in perspective, the current volume of Bitcoin trading is more than double what was seen at the height of the 2017 bull run – the time of its historic high, where it came to be worth another $ 20,000.
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The sudden liquidation does not seem to have changed the general bullish sentiment in the market. According to the Bitcoin (BTC) Shorts vs. Longs distribution chart BTCtools, the vast majority (82.6%) of Bitcoin’s open interest is long, while only 17.4% is short. Likewise, the Index Crypto Fear & Greed from Alternative.me it is currently at its highest value in over a year at 80 – indicating a state of extreme greed in the market.
While it is currently uncertain what caused the $ 1,000 loss, it may have been triggered by a wave of automated settlements. According to a recent notice from Binance, a single user placed a large number of orders under his BTCUSD 0925 Quarterly Futures contract, creating a sudden increase of almost $ 100,000.
Binance says that this wick did not cause settlements on its trading platform, but it may have affected these aggregate values in several markets using a trading bot – a tool used to trade on several exchanges and / or markets simultaneously.