This past Friday was a virtual bloodbath. People were longing in, refreshing their browsers looking to sell as fast as humanly possible. Or at least that is the image I saw in my mind when reading the news.
Monthlong rally cut short
While there where no literal blood running in the streets, I imagine that a lot of traders got a bit light-hearted as they saw their trades being liquidated.
Last month's rally was very abruptly cut short yesterday. Both Bitcoin and Ethereum registered a new two weekly low of $21,747 and a new weekly low of $1,726 respectively.
This unexpected dip, or crash if you will, resulted in 157,098 traders getting liquidated over 14 hours. Trades to the tune of $551 million. Of this sum, Bitcoin made up the largest part with trades totaling $203 million. But Ethereum was not far behind with its $140 million.
Total liquidations, picture provided by: Coinglass
The chart indicates the type of trades that are getting liquidated. The green is long-term trades and the red is short-term trades. And as seen in the chart the number of long-term trades that got liquidated far outweighed the number of short-term trades. This also goes hand in hand with the recent bullish sentiment that has been in the market over the last month.
If this will cause the overall bullish sentiment in the market to switch is probably too early to say.
Federal Reserve Bank of St. Louis President James Bullard said he would favor an increase of 75 basis points.
The reason behind this sudden crash is thought to be the announcement that the Fed is looking to raise the interests in the US by another 75 basis points, or 0.75% if you prefer, in September. And it was believed that this news was the cause behind the crash. And if it goes through it is very likely that it will have a similar effect on the market at the 75 base point increase in June.
If I were a trader I would be bringing out some of those old data points and looking for possible opportunities with a similar interest hike looking to come next month. But of course not any advice, just a friendly suggestion. =)
What is your thought on last Friday's bloodbath? While it surely is not of the magnitude to go down in history as anything special. There sure were torrents of blood flowing on the virtual streets. I hope that you were not fought up in it. But please share your thought on the event and on the crypto market as a whole. The comment section is open to you.
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See you on the interwebs!
Picture provided by: https://pixabay.com/
