Bitcoin rose above $47,000 in the early hours of Tuesday, the highest level since late December, as the cryptocurrency market witnessed a massive liquidation of both long and short positions. Bitcoin gained 7.32% in the last 24 hours, while more than $283 million worth of trades were liquidated across major exchanges.
$283 in Liquidation Across Exchanges
Bitcoin, the largest and most popular cryptocurrency by market value, surged above $47,000 in the early morning of UTC+8 on Tuesday, reaching its highest price since December 25, 2021. The digital asset gained 7.32% in the last 24 hours, outperforming most of its peers in the crypto market.
The rally came amid a massive liquidation of both long and short positions in the cryptocurrency market, as traders adjusted their bets in response to the volatile price movements. According to data from Bybit, a crypto derivatives analytics platform, more than $283 million worth of trades were liquidated across major exchanges in the past 24 hours, including $127 million of long orders and $155 million of short orders.
Topped $47,427 on Binance
The liquidation was triggered by a sudden spike in the price of bitcoin, which broke through the resistance level of $46,000 and triggered a cascade of buy orders and stop-loss orders. The price of bitcoin reached as high as $47,427 on Binance, the world’s largest crypto exchange by trading volume, before retracing slightly.
The surge in bitcoin’s price also boosted the sentiment in the broader crypto market, which has been recovering from a sharp correction in late December and early January. The total market capitalization of all cryptocurrencies rose to $2.18 trillion, up 5.6% in the last 24 hours. The dominance of bitcoin, which measures its share of the total market value, increased to 41.8%, indicating that bitcoin is leading the market rally.
Driven by Rising Adoption
Some analysts and investors attributed the rise in bitcoin’s price to the growing adoption and acceptance of the cryptocurrency by institutional and retail players, as well as the anticipation of more regulatory clarity and innovation in the crypto space.
For instance, on Monday, the mayor of Miami, Francis Suarez, announced that the city would start paying a portion of its employees’ salaries in bitcoin and allow residents to pay their taxes and fees in bitcoin. Suarez also said that Miami would hold some of its treasury reserves in bitcoin, following the example of El Salvador, which adopted bitcoin as a legal tender in September 2021.
Spot Bitcoin ETF Decision Expected
Additionally, on Tuesday, the U.S. Securities and Exchange Commission (SEC) is expected to make a decision on the first batch of applications for spot bitcoin exchange-traded funds (ETFs), which would track the current price of the cryptocurrency rather than futures contracts. The crypto industry and investors are hopeful that the SEC will approve the spot bitcoin ETFs, as they could provide a more accessible and regulated way to invest in the digital asset.
More Volatility Expected
However, some challenges and risks remain for the crypto market, such as the uncertainty around the monetary policy and interest rate decisions of the U.S. Federal Reserve, the regulatory crackdowns and bans in some countries, such as China and India, and the technical and security issues that could affect the network performance and user experience of the crypto platforms.
Therefore, the price of bitcoin and other cryptocurrencies could still face high volatility and fluctuations in the short term, as the market reacts to the changing supply and demand dynamics and the evolving macroeconomic and geopolitical factors.