What happened to Bitcoin? Over a million crypto traders liquidated in less than 24 hours

What happened to Bitcoin? Over a million crypto traders liquidated in less than 24 hours

Bitcoin fell as much as 18% yesterday in only a couple hours. According to bybt.com,

• In the past 24 hours, 1,064,107 traders were liquidated.
• The largest single liquidation order happened on Binance-BTC value $68.73M
• Total liquidations in the previous 24hrs has surpassed $10.21B

There was bullish sentiment throughout last week as Dogecoin’s historic run took hold. Additionally, Coinbase’s direct listing officially began trading on Wednesday. This led to a significant amount of levered-longs jumping into the market above $60K. From the graph in Yann & Jan’s tweet below, you can see a spike in short-term holders (orange line) entering the market above $60k. These traders were then wiped out in just a couple hours.

Such an incredible indicator for buying the #Bitcoin dip.

Today’s ‘LTH SOPR (24h MA)’ reset:https://t.co/hovY3AuP4O pic.twitter.com/yOqC17aEoP

— Yann & Jan (@Negentropic_) April 18, 2021

Yann & Jan’s LTH SOPR (24h MA) indicator has been one of the best ways to buy dips once mass liquidations create a ‘reset’ period in the market.

Chinese Mining Blackout

In the tweet below, you can see the Bitcoin network experienced a massive drop in hash rate as a blackout occurred in the northwest region of China where a large amount of miners operate. From a tweet published by Wu Blockchain, you can see the percentage of hash rate lost in each of the largest mining pools below.

The hashrate of Bitcoin mining pools plummeted in 24 hours. Antpools fell by 24.5%, https://t.co/1YRYr58dLy fell by 18.9%, Poolin fell by 33%, Binance pools fell by 20%. The reason is that Northwest China is undergoing a complete blackout for safety inspections. pic.twitter.com/vaWgYsMEFH

— Wu Blockchain (@WuBlockchain) April 16, 2021

Fortunately, once the power returned, Bitcoin’s network hash rate recovered to previous levels. Interestingly enough, Bitcoin on-chain analyst Willy Woo has claimed hash rate and price have always been correlated and that yesterday’s decline may have been started by fears around the loss of hash rate.

Price and hash rate has always been correlated.

This is BTC price vs today’s hash rate collapse (from the Xinjiang blackout). pic.twitter.com/mywEZLHlA0

— Willy Woo (@woonomic) April 18, 2021

The recent decline has led some to consider the negative effects of mining centralization within China. However, miners are continuing to rejoin the network as price rebounds to $56,000.