Bitcoin's Thursday Flash Crash Wiped Out $500 Million: What's Driving The Volatility?

Bitcoin‘s BTC/USD trading has seen considerable fluctuations around the $100,000 mark, igniting discussions about the causes of this increased volatility.

What Happened: On Thursday, Bitcoin touched a high of $103,000, only to quickly drop to $92,000. This rapid decline was largely due to aggressive profit-taking and a chain reaction of liquidations in an overly active derivatives market.

According to Nic Puckrin, co-founder of Coinbureau, the profits realized from Bitcoin sales reached their highest levels since November 2021. This situation echoes a previous occurrence that led to a major market correction.

The rapid crash resulted in the loss of $500 million in liquidations within a single day. However, Bitcoin found support within the liquidity zone of $92,000 to $94,000. Following this drop, BTC has shown a recovery, although additional profit-taking could trigger more short-term volatility.

Why It Matters: Crossing the $100,000 milestone is a notable achievement in Bitcoin’s history, but such flash crashes after hitting new highs are not unusual. For instance, during the bull run of 2017, Bitcoin experienced similar pullbacks, which often preceded subsequent record highs. This historical pattern suggests that the $100,000 resistance may weaken during future attempts to surpass it.

Puckrin also emphasized the importance of market positioning, urging traders to consider their strategies in light of these dynamics. Meanwhile, crypto chart analyst Ali Martinez pointed out that the key support level for Bitcoin stands at $96,870. He noted that approximately 1.45 million addresses bought 1.42 million BTC at this price. Martinez believes that maintaining this demand zone could enhance the chances of Bitcoin continuing its upward movement.

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• Anthony Scaramucci Claps Back At Bitcoin Naysayers, Says There’s ‘Plenty Of Room To Run’: Is His $150,000 Prediction Within Reach?

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Market news and data suggest ongoing discussions and analyses related to Bitcoin’s volatility, reflecting the ever-changing sentiment in the cryptocurrency landscape.

Bitcoin, Volatility, Market