The price of the leading cryptocurrency, Bitcoin [BTC] fell by $8k within hours earlier today on Wednesday as hodlers saw a return of levels not seen since the beginning of February.
Selling pressure, already high, kept coming as claims of a fresh Chinese crackdown combined with a stocks rout and a strengthening USD.
In what’s being called by some a “capitulation bottom,” Bitcoin did not hold $40k support and commenced a brief freefall below its significant 200-day moving average.
While the dip in dollar terms was average by Bitcoin’s standards, it caused mayhem among speculative traders, with one hour seeing $2.7 Bln of liquidations. Total 24-hour liquidations stood at $6.5 Bln.
“Long leveraged traders liquidation spike thereon move down within the past hour,” Philip Swift, founder of analytics resource LookIntoBitcoin, tweeted alongside a chart.
Rafael Schultze-Kraft, the co-founder of fellow analysis resource Glassnode, outlined that short-term BTC investors were now at a loss which current prices represented a line within the sand.
He referenced Glassnode’s Short Term Holder MVRV indicator, which looks at the worth of unspent transaction outputs 155 days old or less.
“Short-term holders now beneath the water, as STH-MVRV drops below the neutral line. Key level,” he added.