Cryptocurrencies showed strong resilience on Wednesday, with prices bouncing back from the previous day’s sell-off following bitcoin’s record high. Bitcoin surged by 7.2% to $66,801.38, while ether skyrocketed over 12% to $3,793.99, marking its highest level since January 2022.
On Tuesday, bitcoin reached a new intraday high of $69,210, the first time since November 2021, before experiencing a sharp correction. Despite the pullback, Enclave Markets CEO David Wells remains optimistic, viewing the correction as a typical occurrence after hitting multiyear highs.
Wells predicts a potential retest of the highs, which, if surpassed, could lead to significant market movements, particularly with significant options positions in play. The recent market volatility has triggered around $100 million in short liquidations and $236 million in long liquidations across centralized exchanges, according to CoinGlass data.
Leveraged traders face the risk of liquidation when their positions move against them, either driving prices up as short sellers rush to cover their losses or causing long positions to be sold off to cover losses. This dynamic can contribute to sharp corrections and frenzied trading activity during market uptrends.
Source (CNBC)
