Bitcoin and the Wider Crypto Market Suddenly Dropped as Long Positions Spiked to a Level Not Seen Since the June 28 Crash

The largest cryptocurrency, Bitcoin, crashed over 7% in a few hours on Tuesday, with the asset falling briefly to $58,000. This sparked a wider market

Bitcoin and the crypto market at large took a downturn on Tuesday, with BTC crashing by over 7% in a few hours. This sparked a wider market capitulation as altcoins bled significantly.

As always, price movements of this magnitude in the crypto market don’t occur without an underlying reason. Here’s what caused the sudden crypto market crash.

Long Traders Got Greedy

According to data from Santiment, long positions on the crypto exchange dYdX suddenly spiked to the levels seen when Bitcoin reached its all-time high in March. Such spikes usually foreshadow a move in the opposite direction.

A similar greed trend was also seen on July 28 when long traders got greedy amidst a flourishing Bitcoin price. The saturated market, caused by the large long positions, saw Bitcoin drop to $58,000.

The Santiment data also pointed to a reverse trend on August 5, when short positions on dYdX surged as Bitcoin dropped below $50,000. A large short trading volume was seen on the California-based exchange, prompting the market to shake off greedy traders with an upside trend.

Dump Wreck Bulls

The sudden pump sparked a liquidation spree in the crypto market, with bulls being the major victims. According to data from Coinglass, over $320 million worth of trading positions were liquidated in the past 24 hours.

Interestingly, Ethereum bulls were wrecked the most, with over $93 million in long positions being wiped out of the market in the past 24 hours. However, late shorts also experienced liquidation as ETH slightly recovered to $2,476, with $9.6 million being liquidated.

Bitcoin traders also experienced a huge liquidation as $96.56 million in positions were wiped out of the market. Of this amount, $85.42 million were longs, while $11.13 million were shorts. At press time, Bitcoin was trading at $59,438.

Other assets also experienced liquidation spikes as altcoins bled terribly. Notably, SOL, PEPE, and XRP traders experienced liquidation to the tune of $12.12 million, $4.3 million, and $3.15 million, respectively. At press time, SOL traded at $147, while XRP recovered slightly to trade at $0.57.

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