A sudden drop in Bitcoin’s value by 5% on Tuesday triggered significant losses for traders with leveraged positions in cryptocurrencies, culminating in over $165 million in financial setbacks within a brief period.
This dramatic fall occurred early on March 2 UTC, with Bitcoin’s price plummeting from $69,450 to as low as $65,970 in under 30 minutes, according to TradingView data.
The sharp decrease in Bitcoin’s value led to the liquidation of leveraged positions exceeding $165 million, as reported by Coinglass.
This included over $50 million in Bitcoin long positions and more than $40 million in Ether longs, which constituted the majority of the losses.
Additionally, Dogecoin and Solana’s SOL saw around $6 million and $4 million in long positions liquidated, respectively, following behind Bitcoin and Ether in terms of impact.
Concurrently with the market downturn, Bitcoin exchange-traded funds (ETFs) experienced a significant withdrawal of funds, totaling $86 million, thereby ending a four-day streak of net positive inflows, based on FarSide data.
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Notably, BlackRock’s ETF emerged as the top-performing fund with net inflows of $165.9 million, while Fidelity’s inflows amounted to $44 million.
However, these gains were offset by a substantial $302 million in outflows from Grayscale’s GBTC, resulting in net daily outflows of $85.7 million across all funds.
In the midst of these market movements, the US dollar-pegged stablecoin Tether (USDT) also experienced volatility, briefly deviating from its $1 peg to $0.988, as indicated by CoinGecko data.
The cause of this fluctuation remains uncertain, with speculation about whether it was due to an API error among data trackers or an actual drop in currency value.
Other price trackers did not register this depegging. Despite inquiries, Tether’s response to the situation was not immediately available.
This series of events underscores the volatility inherent in the cryptocurrency market, highlighting the risks associated with leveraged trading and the sensitivity of digital assets to market shifts.
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