Flagship cryptocurrency asset, Bitcoin has fallen by almost $10,000 from its newly established all-time high, as the dollar index continues to gain strength, despite troubling Consumer Price Index (CPI) data. This has caused a liquidation event in which $971.5 million worth of leveraged longs have been liquidated from their positions in the past two days.
Data from Coinglass which formerly went by the name Bybt, revealed that a total of $971.5 million leveraged longs got liquidated in the past 48 hours. Monday was the worst day for leveraged longs as a total of $783.37 million got liquidated as Bitcoin’s price declined from a high of $66,281.57, to close the day at $63,557.87, a 4.10% decline.
On Tuesday, a total of $188.13 million got liquidated as Bitcoin’s price moved from $63,721.20 at the open, to trade as low as $59,016.34, according to coinmarketcap. This represents a 7.38% decline.
What you should know
Data from Glassnode reveals that last week’s Bitcoin net flow was positive by $205 million. This indicates that there was a sell-off to exchanges as investors start to take profits at current price levels. $1.6 billion were sent to exchanges while $1.4 billion was taken out.
According to a report from the Labour Department of the United States, the CPI rose 0.9% last month. This comes after gaining 0.4% in September. In the 12 months through October, the CPI has now accelerated 6.2%. This represents the largest year-on-year advance since November 1990, following the 0.4% jump to 5.4% in September.
In the past 2 days, the dollar index has continued to grow in strength despite troubling CPI data. The dollar index, a measure of the strength of the United States Dollar, has appreciated by 1.23% in 48 hours from 95.1 basis points at the start of the week, to trade as high as 96.27 basis points in the earlier hours of today.
What they are saying
On-chain analyst William Clemente revealed over the weekend that whales have begun to sell their Bitcoin positions. Using the ‘long term holder net position change’ metric, he stated, “Long-term holders buy BTC into weakness and sell into strength. We’ve just gotten our first red prints on LTH net position change in over 6 months, showing bull market distribution has begun.”
He further stated, “This is natural bull market behavior; as you can see in 2020 this distribution began in October and peaked out in January of this year.”
In another tweet, he explained that funding rates have calmed down across the board. He stated, “A lot of the greed in the Bitcoin market has been neutralized, for now.”
Bitcoin recently ushered in a soft fork upgrade called taproot that brings onto the Bitcoin network new features such as smart contracts capabilities on the network. Bitcoin now trades at $59,617, down 1.63% for the day, as of the time of this writing.