Bitcoin's price dropped from $71,000 to $69,000 in one hour on Friday, triggering a market crash.
The crash caused nearly $400 million in liquidations, with longs suffering more than shorts.
The decline in Bitcoin rippled through the altcoin market, with Ethereum and memecoins like Doge and Shiba Inu crashing as well.
Technical analysis shows that traders are betting more on a continued Bitcoin price decline than a rise.
Investors should take a cautious approach to the market at this point, due to the crypto market's volatility.
The crypto market crashed somewhat on Friday this week, with Bitcoin leading the charge after crashing from around $71,000 to $69,000.
By the end of the day, around $400 million in long positions had been taken off the board, with even more set to be wiped out if Bitcoin moves up or down.
How are traders placing their bets? What happened with Bitcoin exactly? What might happen next?
Let’s find out.
On Friday afternoon, Bitcoin crashed in a matter of hours—40 minutes even—from above $71,000 to under $69,000.
Unsurprisingly, Ethereum followed almost immediately, with a drop from $3,800 to below $3,650.
With Ethereum down, the rest of the altcoin market followed suit, with many altcoins crashing by double digits in mere hours.
This decline triggered nearly $300 million worth of liquidations according to Coinglass data, with the total figures for Friday amounting to around $411 million.
The crypto market in liquidations
As shown above, the bears lost a meagre $48 million, while the bulls lost nearly eight times that figure, at $363 million.
The memecoins, aside from being highly volatile cryptocurrencies themselves, also have strong price correlations to Bitcoin.
Bonk, for example, crashed about 9% in an hour, and by nearly 20% at the end of the day.
We saw crashes of nearly 15% on others like WIF and PEPE.
The memecoin market is red
Dogecoin and Shiba Inu on the other hand, crashed by 9% and 6% respectively, with a general 9% crash across the memecoin market.
All of the chaos in the crypto market didn’t seem to affect the stock market however, with major Wall Street stock indexes like the S&P 500 and the Nasdaq remaining relatively stable.
This drop in Bitcoin’s price has pushed it far below the psychological $70,000 zone, which might turn out to be a struggle to break above once again.
Bitcoin exchange liquidations
However, what might happen if Bitcoin were to actually recover?
According to the liquidation map from Coinglass, it appears that traders are betting on a continued decline in the cryptocurrency, with a staggering $3 billion at stake across all exchanges, if Bitcoin were to rally up above its $73,800 price once again and test $75,000.
This is a heavy contrast against the $1 billion at stake if Bitcoin were to crash to $62,000.
This means that more traders are betting on a continued decline in the cryptocurrency, which isn't a very bullish look on Bitcoin so far.
More shorts than longs
This outlook is further strengthened by the Bitcoin long/short ratio, which shows that across exchanges, around 52% of traders are betting on a continued decline, as opposed to 47% of long traders as of 8 June.
So what happens now?
Will Bitcoin continue further down from here, or will we see a miraculous comeback?
Investors should take a "wait and see" approach at this point, considering the volatile nature of crypto at this point, and the tendency for prices to go in either direction very rapidly.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.