• Bitcoin reached a new all-time record high of $69200 on Tuesday. Then, it plummeted to as low at $59700 during a violent sale.
  • CoinGlass data indicates that the correction led to cascading liquidity, resulting in the liquidation of over $1 billion in leveraged derivatives across all digital assets.

BTC Price Index and Live Chart – CoinDesk”>(BTC) plunged more than 10% from its new all-time high on Tuesday as heavy selling on crypto exchanges capped the price surge beyond $69,000, sending the price below $60,000 at one point.

BTC was trading at $69,200 at the start of the day. However, the Binance order book showed that large amounts of BTC were being sold at higher prices. Over 300 BTC worth approximately $20 million will be sold for $69,000, and over 500 BTC at $70,000.

Binance USDT/BTC order book (Binance).

The selling pressure was a major barrier for bitcoin’s price. It sent the crypto lower. BTC dropped more than $1,000 within a minute after the CoinDesk Bitcoin Index, ( XBX), briefly reached an all-time high at $69,208, 15:04 UTC. CoinDesk Bitcoin Index shows that the sell-off accelerated in waves. The price dropped below $65,000 and then further down to $59,700. BTC was back at $62,800 by the time of publication.

Read more: Bitcoin hit a record high. Here’s what could happen next

ETH Price Index and Live Chart – CoinDesk”>(ETH) and solana (ADA), dogecoin <a data-position="autolink" href="http://coindesk.com/price/dogecoin/" title="Dogecoin Price

Crypto liquidations are on the rise

CoinGlass data shows that the wild price movement triggered a severe wipeout of leverage, liquidating more than $1.1 billion in derivatives trading positions for all digital assets over the past 24 hour period. CoinGlass reports that $870 million was liquidated in longs or bets made on increasing asset prices.

Crypto liquidations across all digital assets (CoinGlass) Cryptoliquidations across all digital asset (CoinGlass).

When an exchange liquidates a position that is leveraged, it does so due to the loss of money or margin by the trader. The dynamic of asset price drops can trigger a cascade liquidation, which will exacerbate losses and prices. Liquidation events are often a sign of a price peak or bottom.

The action on Tuesday even exceeded the $1 billion leveraged flush that occurred in August last year, when bitcoin dropped from $28,000 to below $25,000. It took several weeks for bitcoin to begin moving upwards again.

Will Clemente , co-founder of Reflexivity Research , noted Tuesday’s events were reminiscent of bitcoin’s actions around Thanksgiving 2020. The bulls were aiming for a takeover of $20,000, but bitcoin fell to $19,500, then cratered and dropped in a short time to about $16,000.

Clemente stated in an X message that “any dips are to shake out over leveraged apes at this point and buy.”

Updated headline and prices (March 5, 19h45 UTC) as the bitcoin sell-off has accelerated. Adds liquidation data.

UPDATE (5 March, 20.55 UTC). : Adds historical context.

Sheldon Reback and Nick Baker edited the book.