Bitcoin Plummets 3.5%, $236 Million Wiped Out in Crypto Liquidation

• On Wednesday, a cascade of liquidations caused bitcoin and the crypto market to drop.
• Retail investors may have been caught off-guard by the sudden selloff.
• The Fear and Greed Index has fallen back to a Neutral position, with Bitcoin trading around $28,800 and Ethereum trading around $1,800.

Sudden Liquidation Cascade Causes Crypto Market Drop

On Wednesday at around 9 am BST, without warning a liquidation cascade began on bitcoin. Within 30 minutes the price had dropped from $30,082 to around $29,000, a more than 3.5% move to the downside according to Coinglass, who reported that $236 million was wiped out for the day.

Retail Back In The Crypto Market?

It appears that retail had taken an interest in the crypto market as longs vastly outnumbered shorts and leverage was piled on with abandon. This may have set up whales for a trap that trapped many of the new retail leveraged traders who had entered the market expecting an upside explosion but instead got hit with liquidations.

Fear And Greed Index Falls To Neutral Position

The Fear and Greed Index has fallen back to a Neutral position today at 52 which is quite some fall from Wednesday’s level in the Greed at 63 reflecting fear still in the crypto market given Biden’s administration stance towards this asset class. As it stands so far today Bitcoin is flat at around $28,800 just under its very important support at $28,900 while Ethereum has fallen back inside its upward channel since January testing its upper bound with support currently found at $1,715.

Liquidations Becoming Periodic

These liquidation events are becoming ever more periodic with one occurring early March followed by another in early February as if they had prescience of what was about to happen.

Conclusion: 24 Hours To Tell Which Way Prices Will Go

Next 24 hours will be crucial in telling which way prices will go as Bitcoin looks set to test its key support point of 28900 while Ethereum could fall back down into its lower bound potentially going under 1800 if it does so .

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