Over $300 Million Liquidated as Bitcoin Takes a Sharp Plunge

The 14th of November saw a rapid descent in Bitcoin’s value, dropping from $36,600 to below $35,000 in continuous freefall, marking one of the most significant sell-offs since August, according to CoinGlass data. This sudden plunge came amidst surprising U.S. Consumer Price Index (CPI) figures that remained unchanged, contrary to the economist-predicted 0.1% increase. Moreover, the core CPI only saw a 0.2% rise, falling short of the anticipated 0.3%. Intriguingly, Bitcoin spiked nearly 1% within minutes after this announcement.

BTC/USD 4 hours-chart on Binance | Source: TradingView

Joseph Brusuelas, Chief Economist at RSM, viewed this as positive news for many, highlighting a core goods price decrease of 0.2% in October. “Inflation is expected to cool further, especially as housing costs are expected to ease by mid-2024,” he shared. October’s subdued inflation has been seen as a favorable signal for risk assets. While stocks surged, bond yields significantly declined. However, Bitcoin abruptly reversed its gains, plummeting by 4% to around $35,000, dragging the entire market into a sea of red. Ethereum, the second-largest cryptocurrency, also dropped by 6% to below $2,000.

Numerous investors faced liquidation as Bitcoin experienced intense fluctuations on the evening of November 14th. Source: CoinGlass.

Over the last 24 hours, long positions worth over $307 million were liquidated—the largest sell-off since August 17, when Bitcoin swiftly dropped from $28,000 to around $25,000 within minutes.

This substantial liquidation volume indicates that many investors may have overlooked caution when Bitcoin initially reacted positively to the U.S. CPI data, only to sharply reverse course. CoinGlass data reveals that 88,667 traders were impacted, with Bitcoin traders bearing the brunt, suffering losses of $133 million, followed by approximately $70 million from ETH traders.

Prior to this event, analysts at JPMorgan noted an overly optimistic sentiment within the cryptocurrency community regarding Bitcoin spot ETFs. The company highlighted that similar ETFs exist in Canada and Europe but have received “insignificant attention from investors.”

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