Bitcoin (BTC) has plunged more than 17% in the last 24 hours as the futures market saw large liquidations across the board.

A settlement occurs when futures gear positions fall to a certain degree. For example, a position that uses 10x leverage will be wound up or depreciated if the BTC price falls 5%.

What triggered the celebration of the mass closure of bitcoin?
If the bitcoin futures market is too indebted and crowded, even minor price fluctuations can lead to massive liquidations.

According to analysts at Santiment, a data mining company, the name was the reason for this year’s second largest Bitcoin deal, according to Cointelegraph.

More than 2,700 BTC were transferred shortly before the recession, which was more than the 2,000 BTC flow seen before the March 2020 crash, when Bitcoin fell below $ 4,000. Analysts say:

“As we noted yesterday, there was an 11-fold increase in currency flows, which adjusted the price of #Bitcoin from $ 58.3 thousand in #ATH. Collecting additional data showed that the name was responsible for this year’s second largest BTC transaction, ie import of 2700 tokens for the wallet’s advance sale. The same address also made a $ 2,000 BTC import in March last year when the Black Thursday correction occurred. A total of 73 transactions were completed during the year that existed, of which 9,1935 BTC were imported. All icons move within minutes of arrival. ”

Strong sales in the spot market probably triggered strong sales pressure in the futures market due to the liquidation of many long positions.

When Bitcoin began its correction on February 22, the dominant foreign exchange rate of the dominant cryptocurrency fluctuated around 0.15%, although it continued to decline.

This trend showed two things: Tight-headed buyers actively bought in each downturn, and the market was still overheated even during the downturn.

As a result, new buyers were constantly wound up during a short-term downward trend, triggering a brutal winding up cycle.

However, a trader called it, under the pseudonym “Byzantine General”, “coordinated change” and said it was a healthy trend.

If bitcoin falls on the so-called black swans or any deviations, there will be cause for concern. But the trader indicated relatively large purchase orders to show that buyers are waiting to go in to buy on dip. He said:

“I’m happy to see signs that this is a coordinated clean-up because it indicates that BTC is still bullish and the big players just want to fill their bets. If it had not been planned in advance, it would have been much scarier. ”
In the short term, it is crucial that Bitcoin defends its support zone of $ 45,000 so that the short-term cycle does not enter its bearish zone. Below that, the probability of a deeper and longer correction increases rapidly.

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