Crypto Traders Face Liquidation Wave Amid Market Declines
Major Liquidation Day for Crypto Traders
On October 23, crypto traders who anticipated rising markets faced a significant setback, marking the second-largest liquidation day of the month. According to data from CoinGlass, total liquidations reached $261 million, with long positions accounting for $203.5 million of that total. This event follows a larger liquidation of $450.8 million on October 1, coinciding with a 5% drop in Bitcoin’s value.
Bitcoin and Ether Experience Significant Losses
The recent wave of liquidations heavily impacted Bitcoin and Ether. Ether traders experienced the most considerable losses, with over $77 million in long positions eliminated. Bitcoin followed closely behind, with $58.3 million in liquidations. The situation was exacerbated by Bitcoin's price decline, which disappointed traders who had anticipated continued upward momentum after it approached $70,000 on October 21, the highest point in three months. However, Bitcoin's momentum faltered, dropping to a low of $65,500 before slightly recovering to $67,386, reflecting a mere 0.5% increase over the previous 24 hours.
Ether also faced challenges, recording the largest decline among the top 10 cryptocurrencies. It fell by 1.7% to $2,552, a notable drop from its 24-hour high of $2,620. Ether had briefly reached a two-month peak of $2,750 on October 21 before the subsequent pullback. On-chain data indicates that high transaction fees on Ethereum's network may be suppressing staking demand, potentially affecting investor sentiment.
Institutional Investment in Bitcoin ETFs Remains Strong
Despite the tumultuous day, institutional investors continued to invest in Bitcoin exchange-traded funds (ETFs) in the United States, with net inflows of $198.5 million. BlackRock's iShares Bitcoin Trust ETF led the way with inflows of $323.6 million, although outflows from the ARK 21Shares Bitcoin ETF and the Bitwise Bitcoin ETF slightly offset the total. These inflows follow a week of positive momentum for Bitcoin ETFs, which collectively added nearly $2.7 billion between October 11 and October 21.
Surge in Bitcoin Whale Holdings
The number of large Bitcoin holders, known as whales, has surged to its highest level since January 2021, suggesting potential for a price rally. Reports indicate that the number of entities holding at least 1,000 BTC rose to 1,678 earlier this week. The increase in whale accumulation is viewed as a positive indicator for Bitcoin's price outlook. While whales are expanding their holdings, retail investor activity has slowed significantly. In the past 30 days, retail investors have added only 1,000 Bitcoin, marking a historically slow accumulation pace. In contrast, larger investors holding between 1,000 and 10,000 BTC have increased their holdings by 173,000 Bitcoin this year, compared to the 30,000 added by retail investors.
Predictions for Bitcoin's Future Amid Political Developments
Meanwhile, Jeff Park, head of alpha strategies at Bitwise, has predicted that Bitcoin could surge to $92,000 if Donald Trump wins the 2024 U.S. presidential election. In a recent post on X, Park explained his analysis of Bitcoin's price movement against Trump's odds on the decentralized betting platform Polymarket, applying merger arbitrage-style probability calculations. He expressed a strong likelihood of a post-election surge, stating, “I project a Trump victory could push BTC to ~$92,000,” contributing to a growing list of analysts who believe a Trump win could significantly enhance the crypto market.
