The price of Bitcoin drops to $87,500 amid widespread liquidation of long positions.
The price of Bitcoin fell by about $3,000 as the first session of the U.S. markets began after the holiday, with the cryptocurrency experiencing a rapid decline in just a few hours.
This sudden drop led to a wave of pressure in the derivatives market, resulting in the liquidation of more than $70 million of leveraged long positions within four hours, according to data from the “Coinglass” platform.
This move reflects the severity of the volatility that characterizes the cryptocurrency market, as leverage amplifies both profits and losses.
When prices fall rapidly, traders holding leveraged long positions face the risk of forced liquidation when the collateral is no longer sufficient to keep those positions open.
Collective liquidation events often exacerbate the downturn due to automatic sell-offs that add additional pressure to the market at a time when prices are already declining.
According to the latest available data, the price of Bitcoin is trading at $87,575 at the time of writing this article, down about 2% over the past 24 hours.
