Bitcoin’s 8% price drop sets off liquidations worth $32M

The once-hibernating bear doesn’t look happy.

Bitcoin’s price fell to new levels today, with its impact being felt across the cryptocurrency market.  The price of the world’s largest cryptocurrency, while falling since yesterday, fell even more today, recording a price fall of 8% in just 8 hours. Like its previous three efforts to surpass the $8k barrier, Bitcoin fell again, unable to sustain any upwards momentum in the market.

Source: BTC/USD on Trading View

The fall of BTC escalated at 1 am UTC on 12 March, triggering liquidations worth $3.4 million. The liquidations increased by 2 am UTC, with the market reporting total contract expirations worth $5.6 million. However, as the price kept falling in the market, longs continued to get liquidated, contributing to a negative sentiment prevailing in the market. In fact, the morning of 12 March saw the liquidation of $10.5 million, followed by more liquidations worth $5.1 million.

Source: Skew

The total liquidation within the day was worth $47 million, with sellers’ contracts worth $36 million expiring.

The bear’s attack was not just limited to the BTC market, but took down the altcoins as well. Ethereum had suffered a loss of 14.29%, at press time, with the price of the coin falling from $196 to $168. This also corresponded with Futures contracts expiration worth $7 million. Out of the total liquidation, $6.6 million were longs liquidations, whereas $425k were buy liquidations.

Source: Skew

The correlation between Bitcoin and other altcoins like Ethereum and XRP has been high. The correlation coefficient between BTC-ETH and BTC-XRP has been above 0.64, which is also known as the Pearson correlation coefficient, meaning, a moderate to strong correlation among the asset exists.

Source: Coin Metrics

Due to this strong correlation between BTC and XRP, the third-largest cryptocurrency fell by 13% and it has once again sunk below the $0.20 level. The value of XRP stood at $0.1863, at press time.