The liquidation heat map reveals that Bitcoin and Ethereum were at the epicenter of this unrest. BTC accounted for the majority, with $169 million in liquidations, while followed with $113 million. This mass liquidation might potentially become the worst day for the derivatives market in the new year.
The Bitcoin chart analysis indicates a significant level of resistance at approximately $43,300, with local support found near the $37,580 mark. For Ethereum, the support level to watch is around $1,929, with resistance near the $2,250 level. Both assets showed signs of consolidation before the drop, with the subsequent sell-off piercing through multiple layers of technical support.
The asset that saw the most liquidation was , which is not surprising given its status as the biggest asset on the market. The sheer value of BTC liquidations shows that risk tolerance among crypto investors is still on an extremely high level.
This liquidation cascade is an important reminder of the high risks involved in trading cryptocurrencies, particularly when using leverage. The swift and severe price actions often shake out investors who use poor risk management strategies.
In the aftermath of such an event, the market may take time to find its footing as investors and traders assess the new landscape. Whether this liquidation event marks the start of a deeper correction or simply a temporary setback remains to be seen, but what is clear is that volatility will go up from here with more unexpected moves occurring on the market.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
