Bitcoin Price Flash Crash Heightens Risk of BTC Dipping to $54K

Bitcoin (BTC) experienced a significant drop in price on May 10, losing over $2,000 in just one hour. This sudden volatility caught leveraged long traders off guard, as the price dropped from a high of $63,494 to a low of $60,308. As of now, the losses are still increasing, with Bitcoin’s value declining by more than 2.5% in the past 24 hours.

Michaël van de Poppe, the founder of MN Capital, described this event as the “final accumulation.” He noted that Bitcoin has exhibited low volatility and unpredictable price movements since February 29. The recent crash brought the price back to an important support level. If this level does not hold, there is a possibility that Bitcoin could further correct to a range of $52,000 to $55,000.

Another trader, Daan Crypto Trades, believed that the flash crash to $60,000 on May 9 was intended to punish those who had entered long positions above $63,000. Those who were betting on a recovery above $64,000 suffered significant losses on May 10. Around $127 million in long positions were liquidated during the 24-hour downturn, resulting in a total wipeout of $175.17 million.

Coinglass data indicated that $9 million worth of leveraged BTC positions were liquidated within the past hour alone, with $6.36 million of those being long positions. This emphasizes the extent of the losses incurred in a short period of time.

The sudden wave of volatility in the Bitcoin market has disrupted an otherwise quiet period. Traders were caught offside as the price dropped, and many long positions were liquidated. It remains to be seen how Bitcoin will recover from this setback and whether it will regain its previous highs.