Crypto Bulls See Millions In Liquidation As Market Slides On Weakening ETF Optimism

A sharp decline in the value of Bitcoin has triggered millions of dollars in liquidation as optimism in the crypto exchange-traded fund (ETF) applications of financial giants slowly weakens.

Bitcoin saw a sharp price decline Tuesday, breaking its five-week bullish streak and sending its value to as low as $34,970.

This huge decline felt across the broader crypto market propelled the liquidation of more than $300 million in leveraged long positions, or bets on higher prices, data from cryptocurrency futures trading and information platform CoinGlass showed.

It is considered the largest amount of liquidated longs in just 24 hours since Aug. 17, when Bitcoin nosedived from the $28,000 threshold to around $25,000 in just a matter of minutes.

A liquidation typically happens when an exchange closes a leveraged trading position because of a partial or total loss of the margin of the trader. Widespread liquidations can impact the value of the crypto asset by increasing price volatility as traders cover their positions.

Tuesday's sharp decline, which saw Bitcoin lose 4% of its value, took place at a time when the crypto market was enjoying the optimistic investors' confidence driven by spot ETF applications, strong support from traditional finance (Tradfi) institutions and the U.S. Federal Reserve's release of its Consumer Price Index (CPI) report.

Crypto analyst Ali shared on X that Bitcoin whales started taking profits when the BTC price climbed from $35,000 to nearly $38,000, underlining that over 15 wallets with more than 1,000 BTC have either sold their position or redistributed their holdings.

"Bitcoin whales started booking profits as the $BTC price rose from $35,000 to nearly $38,000. More than 15 wallets with over 1,000 #BTC sold or redistributed their holdings," the crypto analyst tweeted.

Bitcoin, the world's largest crypto asset by market cap, has been slowly erasing its recent gains since Tuesday. It was trading in the red zone at $35,829.54 as of 5:49 a.m. ET Wednesday, with a 24-hour trading volume up by 31.26% at $24,466,905,171. BTC's price action has represented a 1.99% dip over the past 24 hours and a 1.5% gain over the last seven days.

Data from CoinMarketCap revealed that Bitcoin's total circulating supply stands at 19,542,800 BTC with its value still falling by 2.02% at a $699,548,932,798 market cap.