Bitcoin (BTC) experienced a shock drop overnight. The $ 58,000 coin dropped in price to $ 52,000. Then, on some trading floors, there was a painful pullback below $ 50,000.
However, BTC quickly gained support and was able to stop the deeper fall. On Tuesday, February 23rd, the bitcoin rate is holding around $ 50,000. Trading in the red zone is still ongoing, so the pressure may increase in the coming hours .
US Treasury Secretary Janet Yellen «added fuel to the fire» last Monday, calling BTC a speculative instrument. She stated this during her speech at an event organized by the New York Times.
David Lifshitz of the French company ExoAlpha believes a 15% correction was inevitable. According to this expert, the market was so overheated that the only way to let off steam was a massive sell-off of the cryptocurrency.
Simon Peters, an analyst at eToro, shares a similar view. He stressed that in recent days, almost all digital currencies were in the overbought zone.
The correction was the logical completion of the aggressive pumping of virtual assets. The fall may turn out to be more significant if the bears gain control over the market within the next 24 hours, the analyst noted.
The volume of liquidations on crypto-exchanges amounted to $ 4 billion
The sharp price correction led to multibillion-dollar liquidations of positions in the crypto derivatives market. Over the past 24 hours, the total amount of liquidations on crypto exchanges has reached $ 3.98 billion. The largest liquidation occurred on the Huobi crypto exchange – almost $ 21 million in the bitcoin market.
FTX CEO Sam Bankman-Freed said last week that the cryptocurrency futures market is currently overheated. If this level of activity in the market continues, then multi-billion dollar liquidation days will become the new norm, Paolo Ardoino, CTO at Bitfiex, said in a comment to The Block.