Bitcoin Plummets Below $30,000 in Abrupt Sell-Off: Here’s Why and When It Will Recover

• Bitcoin drops over 3% in 15 minutes, hitting below $30,000 following huge sell order at Binance.
• Long positions account for 98% of the over $160M in liquidations.

Bitcoin (BTC) experienced a sudden drop of over 3% in just 15 minutes during European morning hours on April 19, taking the largest cryptocurrency by market capitalization below $30,000. Further declines took it as low as $29,000.

A huge market sell order of bitcoin occurring from crypto exchange Binance and an unexpectedly high U.K. March inflation figure of more than 10% may have influenced market sentiment. Additionally, more than $25 million in bitcoin futures were liquidated, of which longs, or bets on rising prices, made up 98% of the positions.

The slide led to a sell-off in the broader crypto market, with Ether (ETH), polygon (MATIC), and dogecoin (DOGE) falling 5.3% in the past 24 hours and solana (SOL) losing nearly 9%.

Vetle Lunde, a senior analyst at K33 Research, noted that the hotter-than-expected U.K. Consumer Price Index (CPI) may have weighed over risk assets, including BTC. However, the reaction was far more severe than in other asset classes, leading Lunde to suggest that it was more of a leverage washout.

$BTC Spot CVDs
16K BTC sold at market from binance spot
Other spot exchanges had pretty typical size being sold

Interesting selloff here pic.twitter.com/9SmirkSM7b

— Skew Δ (@52kskew) April 19, 2023

The Binance OI in BTCUSDT perps fell 5.1% in 15 minutes, with effects being more severe in ETH with larger liquidation volume than BTC. A prominent Crypto Twitter trader, @52kskew, pointed out that a 16,000 bitcoin sell order worth over $467 million preceded the sudden dump, which may have likely initiated the long squeeze.

$BTC
Either a new local low here if $29K is held & no FUD is dropped later

However, 16K BTC is unusual size to be market sold solely from Binance spot usually the kind of sale happens before bad news comes out.

if a nothing burger event; could see an omega short squeeze…

— Skew Δ (@52kskew) April 19, 2023

Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of their initial margin. It happens when the investor is unable to meet the margin requirements for a leveraged position. Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.