Current State of the Market
2021 has only just begun and in the first 10 days of the year, Bitcoin rallied by over $11,000 to reach a peak of $42,000 per Bitcoin. This led to the cryptocurrency market capitalisation to rise above the much awaited $1 Trillion mark.
After a meteoric rise from the ashes, Bitcoin has seen its first significant pullback this run: -20% from peak to trough so far.
This in turn has induced a drop in the market capitalisation back under $1 Trillion.
This push to the downside has triggered a very large number of liquidations from the long side of derivatives (futures). In fact, on the 10th and 11th of January, over $2,000,000,000 in long positions have been liquidated.
$1 Billion alone has been liquidated on the cryptocurrency exchange Binance.
Alts were not immune to this drop in price, here some stats:
- ETH: -25% (from $1,350 to $1,010)
- XRP: -32% (from $0.369 to $0.252)
- BCH: -30% (from $650 to $450)
- LTC: -33% (from $186 to $124)
Pullbacks in a Bull Market
Looking back to the 2017 bullish cycle, Bitcoin has witnessed multiple drawdowns along the way to the tune of -30/40%.