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Grayscale Bitcoin Trust

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<p>Just when you thought the cryptocurrency market was ready to take a breather, Bitcoin decides to throw a wild party, hitting a new peak of $73,050. But as quick as a hiccup, it dipped below $70,000 again on March 12. This roller coaster did more than just scare the bejesus out of investors; it led to a staggering $361 million worth of leveraged trades going poof into thin air within a mere 24 hours.<a href="https://cointelegraph.com/news/bitcoin-6-months-etf-liquidity-crisis-analysis" rel="noopener noreferrer nofollow" target="_blank"> </a></p>
<p>This wasn’t just any ordinary day in the cryptocurrency market—it was a day where long position holders, who were betting on the price to skyrocket, faced a whopping $258 million wipeout. Meanwhile, the short sellers, those naysayers betting against the rise, weren’t left to sip champagne either, losing over $103 million.</p>
<h2 class="wp-block-heading" id="a-whirlwind-of-liquidations">A Whirlwind of Liquidations</h2>
<p>This event marked the most significant flush-out of long positions since that fateful day on March 5, when Bitcoin decided to take a dive to $60,800 after reaching its previous all-time high. But let’s not get lost in the numbers. The volatility this time around wasn’t as heart-stopping, with Bitcoin’s price swinging a “mere” 4.85% between its high and low points on March 12. However, don’t let these figures fool you; the market was anything but calm. With <a href="https://www.cryptopolitan.com/bitcoin-layer-2-conference-2024-unveils-first-look-at-all-star-speakers/" data-type="post" data-id="483435" rel="noopener noreferrer nofollow">Bitcoin</a> currently lounging at $71,400, the buzz is far from over.</p>
<p>A spokesperson from 10x Research threw in their two cents, suggesting that the uptick in volatility might be because traders are getting jittery, anticipating a price correction. There’s a whole lot of FOMO (Fear Of Missing Out) floating around, hinting that the rally might just pick up steam again. Over the weekend, futures open interest saw a 5% increase, hinting at traders strapping in for a bumpy ride with tight stops to avoid getting caught in the whirlwind.</p>
<p>Bitcoin and Ethereum took the crown for the most liquidations, with Solana, Dogecoin, and the meme-fueled Ordi also joining the fray. Notably, the most action happened on the crypto exchange OKX, which saw a total of $152 million go down the drain, closely followed by Binance traders who kissed goodbye to $128.4 million.</p>
<h2 class="wp-block-heading" id="the-bigger-picture">The Bigger Picture</h2>
<p>Let’s zoom out for a second. Short sellers have been having a rough year, with losses topping $6 billion as they tried to bet against crypto firms. Bitcoin itself has been on a tear, rallying 130% to a cozy $37,800 over the same period. But here’s where it gets juicy: a “sell-side liquidity crisis” could be looming by September if institutional inflows keep up their pace, according to Ki Young Ju, the brains behind CryptoQuant.</p>
<p>Bitcoin is not just a shiny toy for the average Joe anymore; it’s becoming a heavyweight in institutional investment portfolios. Spot Bitcoin ETFs are gobbling up BTC like there’s no tomorrow, becoming the most successful ETF launch in history with nearly $30 billion under their belt. Ki points out that with ETFs locking away more than 30,000 BTC last week alone, we might be looking at a scenario where demand outstrips supply, igniting a price explosion beyond our wildest dreams.</p>
<p>Despite this bullish outlook, the Grayscale Bitcoin Trust (GBTC) has been the odd one out, with daily outflows hitting the roof. But thanks to the price rally since January, the decrease in GBTC’s Bitcoin holdings hasn’t put a dent in its dollar value. This scenario paints a picture where, despite massive outflows, the value remains robust due to the upward trajectory of Bitcoin’s price.</p>
<p>Ki speculates that if this trend continues, we might witness a supply crunch that could send Bitcoin’s price to stratospheric levels. This speculation is backed by the steady increase in BTC held by accumulation addresses, indicating that a significant number of investors are hoarding Bitcoin, waiting for the sell-side liquidity crisis to unfold.</p>

Nearly $400 million in Bitcoin liquidated as price fluctuations continue

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