The crypto market experienced a sudden shock due to massive Bitcoin long position liquidations, accompanied by the activation of old wallets that had been dormant for 14 years.
Liquidation of Positions Amid Volatility
This week, an anomalous event occurred: a 23,575% liquidation imbalance within one hour led to the wiping out of over $26.6 million in long positions. In that same period, the amount liquidated on short positions was only $113,000.
Reactivation of Old Bitcoin Wallets
Amid the chaos, several ancient Bitcoin wallets containing a total of 80,000 BTC, valued at over $8.6 billion, resurfaced. These wallets, thought to be lost or permanently inactive, suddenly became active, alarming traders and causing Bitcoin prices to dip below $108,000.
Market Nervousness and Consequences
Market participants are concerned that these old coins might hit exchanges, potentially flooding order books and driving prices lower. Bitcoin liquidations alone topped $39.6 million over the past 24 hours, pushing total crypto liquidations above $190 million, with long positions accounting for over 80% of the damage.
The current situation in the crypto market poses risks for participants, as high volatility may persist until it becomes clear how the activated old Bitcoin wallets will be utilized.
