- Bitcoin soared to $64k before abruptly plummeting 7% to $59k, triggering over $600m in liquidations on crypto exchanges.
- The flash crash caught traders off guard, wiping out leveraged long positions as bitcoin swiftly reversed from all-time highs.
- Analysts debate whether this is a short-term correction or change in market direction, with bitcoin struggling to hold $60k support after the sell-off.
Bitcoin, the world’s largest cryptocurrency, soared to $64,000 on Wednesday before quickly reversing to $59,000, according to CoinDesk data. This sudden drop triggered over $600 million worth of liquidations across cryptocurrency exchanges.
The Price Drop
After reaching its all-time high of around $64,000, bitcoin suddenly plunged by over 7% in just a few hours. The price reversal was swift and intense, catching many traders off guard.
Within minutes, bitcoin had gone from testing new highs to trading below $60,000. This flash crash liquidated over $600 million worth of leveraged positions across major exchanges like Binance, BitMEX, and FTX.
The sheer scale of the liquidations indicates overleveraged futures positions were wiped out by the price drop. Traders betting on bitcoin’s rally were forced to exit at a loss when the downturn hit.
Market Reaction
The crypto market reacted with shock at bitcoin’s reversal. After weeks of solid gains, traders did not expect such an abrupt turnaround right as bitcoin touched new highs.
Some analysts pointed to signs of market euphoria and overleveraging as red flags ahead of the correction. With mass liquidations fueling the sell-off, the decline became self-perpetuating.
Others maintained that bitcoin’s fundamentals remain strong despite the price drop. They view the reversal as a temporary setback on bitcoin’s long-term uptrend.
Looking Ahead
It remains to be seen whether the reversal represents a short-term correction or change in market direction. Bitcoin has rebounded from previous flash crashes this year to achieve new highs.
However, analysts will be watching to see if $60,000 will hold as support. A dip below that level could signal further downside ahead. For now, volatility remains elevated as the market tries to find its footing after the tumultuous trading session.
