A BTC/USD flash crash on short timeframes causes confusion for long sellers, but it’s business as usual for analysts.
On March 31, Bitcoin (BTC) dropped more than $2,000 in five minutes when a tsunami of uncertainty shook an otherwise quiet sector.
BTC sees sudden volatility
On Wednesday, TradingView revealed a long trader’s nightmare emerging, with BTC/USD abruptly falling from $59,350 to $57,000.
At the time of publication, the pair had reached a low of $56,713 on Bitstamp, and the losses were still piling up.
“Exactly Bitcoin,” trader Michal van de Poppe said, referring to what has become a common occurrence on small time frames for Bitcoin.
Previously, day traders had concentrated on the upside after news from PayPal triggered a run-up to just under $60,000.
Those betting on the bull run continuing lost big on Wednesday, when the downturn liquidated long positions worth $600 million, part of a $1 billion 24-hour gross wipeout.
The positions’ death, though, was advantageous for quantitative analyst PlanB, as it helped to rid the market of unnecessary leverage and insure more organic future increases. In recent months, similar occurrences have happened with both long and short positions.
“Beautiful stop loss hunting .. again,” PlanB commented on Twitter.
“Now that all leveraged longs are liquidated, we finally have room for breaking $60K in April.”
Funding rates creep up
Meanwhile, signs indicated that more price spikes for Bitcoin will necessitate any effort.
Funding prices on derivatives platforms rose on the day, hitting as high as 0.375 percent on Huobi, indicating that downward pressure is on the way.
Longer-term prospects look optimistic, with analysts pointing to $68,000 and $73,000 as the next obstacles to watch.
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