After Bitcoin hit a new high, it plummeted, with over 300,000 people liquidated and 1.2 billion dollars evaporated

Written by: Mary Liu, Bitpush News

On Tuesday, Bitcoin quickly plummeted after reaching a historic high for the first time in over two years.

According to Bitpush terminal data, BTC broke through $69,210 on Tuesday morning, then rapidly fell back, dipping below $60,000 at one point during the day, and rebounding to above $61,000 at the time of writing.

Ethereum rose by 6.5% to $3,828.81 at one point, then erased all gains, falling to $3,412.64, while other major altcoins like ADA, DOGE, and SHIB dropped by about 10%-12%.

The market's volatility led to nearly $1.2 billion in liquidations across the network.

According to CoinGlass data, in the past 24 hours, 318,392 traders were liquidated, totaling $1.19 billion. Among them, long positions accounted for $878 million, while short positions accounted for $310 million. The largest single liquidation order occurred on the Bitmex platform, valued at $11.35 million for the LINK/USD trading pair.

Will There Be Further Adjustments?

Will Clemente, co-founder of Reflexivity Research, stated on the X platform that Tuesday's liquidations reminded him of Bitcoin's movements around Thanksgiving 2020. At that time, bulls were eyeing a breakout above $20,000, but Bitcoin plummeted after reaching $19,500, quickly falling to around $16,000.

In his X post, he stated: "Any drop is to wash out the high leverage and buy in at this time."

Some analysts warned that as unrealized profit margins approach extreme levels, the market could cool down soon.

Ed Tolson, CEO and founder of cryptocurrency hedge fund Kbit, posted: "The market is expected to see a significant adjustment, potentially between 10% and 20%. Any substantial drop will lead to cascading liquidations in the crypto perpetual swap market, as retail investors rush into leveraged long positions, with funding rates being very high."

He added: "In the coming quarters, we expect Bitcoin to perform well, but there will be significant adjustments along the way."

Oppenheimer analyst Owen Lau also stated: "The speed of the rise is so rapid that we are cautious about adjustments, but in the long run, there are still catalysts supporting positive price movements." He added: "As Bitcoin becomes more valuable, it becomes more useful. At higher market capitalizations and daily volumes, it can support larger allocations. Bitcoin's volatility has been decreasing over time, allowing for larger position sizes."

Clara Medalie, research director at crypto data provider Kaiko, also agreed, stating that the new record is "an important psychological milestone" and "demonstrates the extraordinary ability of cryptocurrencies to rebound and persist in the face of significant resistance."

Accelerating Bull Market Cycle

Speculation about Bitcoin's future price movements is rampant, with some analysts pondering whether the recent pre-halving peak has accelerated the typical market cycle.

Historical data shows that traditionally, Bitcoin takes about 500 days to reach a new all-time high after a halving. This deviation from the norm suggests that we may be entering a new era of Bitcoin price behavior.

There remains a divide in the cryptocurrency community regarding the impact of the recent price adjustments and their influence on future market trends. Some analysts believe Bitcoin may experience sideways fluctuations before continuing its upward trajectory.

Meanwhile, there is speculation that the potential impact of Bitcoin ETF spot inflows and other market factors are key determinants of Bitcoin's path forward.

Since the launch of spot Bitcoin ETFs in January, institutions have begun to flood into the industry, and these ETFs have set record performances in trading over the past six weeks. As of Tuesday's close, spot Bitcoin ETF trading volume hit a new historical record of $10 billion.

Alex Thorn, head of research at Galaxy Digital, stated: "Bitcoin reaching a new all-time high again shows that it will never disappear. In its 15 years of existence, Bitcoin has experienced four pullbacks of over 75%, but each time it has rebounded significantly."