Bitcoin’s bullish momentum in the futures market was disrupted by the recent drop in its price due to concerns about Silvergate, a cryptocurrency-friendly bank. According to Glassnode, more than $62 million worth of longs or bullish bitcoin futures were liquidated during the Asian hours, marking the highest level since August. In contrast, short liquidations amounted to just over half a million dollars. Liquidation occurs when a trader’s bullish or bearish position is closed due to insufficient funds to maintain the position.
This trend of long liquidations indicates that the majority of market participants were betting on a price increase with high leverage. However, the value of Bitcoin dropped by more than 5 percent to $22,000, which is its lowest point since February 14, according to CoinDesk data.
The drop in Bitcoin’s price was caused by Silvergate’s announcement that it is examining its ability to continue as a going concern, and it postponed publishing its annual report with the Securities and Exchange Commission (SEC). Many exchanges suspended their operations related to Silvergate, which raised concerns about the liquidity bottleneck in the cryptocurrency market becoming worse.
