As Bitcoin (BTC) continues to approach the $21,600 mark, traders remain sensitive to even the smallest of price movements. Data from Coinglass shows that on March 8, $24.4 million of BTC longs were liquidated, the highest tally in almost a week. This was accompanied by BTC/USD heading to three-week lows, abandoning $22,000 as support.
Altcoins also saw a significant amount of liquidations, with $95 million of longs and $15.4 million of shorts liquidated on March 8. Glassnode data showed that long liquidations were dominant, with Filbfilb, co-founder of trading suite DecenTrader, noting that it was no surprise that overexposed long positions were feeling the heat.
Despite the liquidations, Bitcoin price action remains relatively flat. February was the least volatile month on record in terms of open and close prices on monthly timeframes. However, The Kobeissi Letter warned that this could be a sign of a larger liquidity crisis across macro assets.
The Kobeissi Letter noted that after a significant liquidation event on March 3, net liquidations in crypto markets exceeded $200 million in one hour. It warned that if liquidity continues to dry up, it could have a significant impact on broader markets.
It is clear that traders remain sensitive to even small price movements, and that liquidations are still taking a toll on traders. As the market continues to evolve, it is important to keep an eye on liquidity levels and be aware of the potential risks that could arise from a liquidity crisis.