Bitcoin lost more than $2,000 in five minutes on March 31 as a major wave of volatility disrupted an otherwise calm market. The flash crash on the short timeframes for Bitcoin induced panic among the long traders. However, it is business as usual for the market analysts.
Tradingview showed a nightmare for the long traders with the flagship crypto dropping from $59,350 to $57,000. At the time of writing, the losses are still mounting with the crypto dropping to lows of $56,713 at some point on Bitstamp. Traders reacted to what has now become a familiar event on short timeframes for Bitcoin.
In the past, the upside price action has been the focus for the day traders as news came from PayPal spawned a run-up that pushed bitcoin to peak just below $60,000. Those who are betting on a continuation of the bull run lost big on March 31, with the downturn liquidating long positions worth $600 million amid a 24-hour total wipeout of around $1 billion.
According to quant analyst PlanB, the drop and liquidation were beneficial since it will help to rid the market of unwanted leverage and guarantee more organic future rises. Based on previous reports, similar events have happened previously with both long and short positions in recent months. He commented on Twitter:
“Beautiful stop loss hunting .. again. Now that all leveraged longs are liquidated, we finally have room for breaking $60K in April.”
Funding Rates Surged
In the meantime, indicators showed reason to think that more price increases for bitcoin would require some work. The funding rates across derivatives platforms were significantly high on the day, reaching 0.375% on Huobi, a major sign that downward pressure is incoming.
The long-term picture remains highly positive, with the analysts saying that $68,000 and $73,000 are the next price levels to watch out for.