Bitcoin tumbles to four-month low as leveraged bets face mass liquidations

By Matthew Brockett

Cryptocurrencies tumbled over the weekend, with Bitcoin slumping to a four-month low as leveraged long positions were liquidated.

The largest digital asset sank 5.7% in the US on Saturday and continued to drop in Asia on Sunday to as low as $62,112, down a further 3.6% and its weakest since July 14. Second-biggest token Ether, which slumped 8% in the US session, fell another 3.4% Sunday to $1,711, its lowest since July 8.

“I think this is a technical move, as Bitcoin broke down through its 200-day moving average of about $73,000, which has caused a slew of liquidations and new shorts to develop,” said Rich Rosenblum, co-founder of crypto market maker GSR.  

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Crypto has been pummeled in recent weeks by a confluence of factors including the expectation of higher interest rates, large outflows from US spot Bitcoin exchange-traded funds, an AI-fueled risk-off mood and continued fallout from the recent $6 billion Binance hack.

Bitcoin has slumped about 25% since Oct. 21. Its low for the year is $57,742, reached on July 1.

Large liquidation events — in which more than $500 million worth of Bitcoin positions are wiped over 24 hours — are becoming a recurring feature in the market, as sharp swings repeatedly flush leveraged traders out of their bets. 

On Friday, Bitcoin’s slide triggered the liquidation of roughly $1.3 billion in long crypto bets over 24 hours, with Bitcoin positions accounting for the majority of that sum, according to Coinglass data. 

In the 24 hours through 9 a.m. Sunday in Singapore, exchanges tracked by Coinglass recorded about $2 billion of crypto liquidations, including $774 million in Bitcoin and $488 million in Ether. Long positions accounted for the vast majority of the liquidations.

From Oct. 30 through Nov. 13, US-listed spot Bitcoin ETFs saw almost $3 billion in net outflows.

Richard Galvin, executive chairman at crypto investment firm DACM, said the impending initial public offering of artificial intelligence company Anthropic PBC may be drawing capital away from crypto.

“Price performance looks very similar to what happened through the SpaceX IPO pricing period earlier this year,” Galvin said. “It appears crypto remains a short term funding source, particularly for retail investors. This is in addition to all the other macro headwinds.”