What Happened: Bitcoin, Ethereum, and other major cryptocurrencies fell by over 17% as the crypto market was dominated by red candles.
Bitcoin was trading at $46,500 at press time, and its market cap fell below $1 trillion for the first time since crossing it a week ago.
The second-largest cryptocurrency by market cap dipped even further, falling over 23% back to $1,452 at the time of writing.
Why It Matters: The selloff across the crypto market had a considerable impact on traders' positions.
Over 474,968 traders were liquidated in the past 24-hours, with a total of $4.4 billion liquidated across crypto exchanges.
According to crypto exchange data aggregator Bybt, this was the largest liquidation event in Bitcoin Futures history, with a record amount of long positions liquidated.
— Bybt (@bybt_com) February 23, 2021
What Else: According to some reports, several crypto exchanges, including Binance and Gemini, experienced a fall in the amount of their Bitcoin reserves.
As the exchange’s Bitcoin reserves continue on a downward trend, the cryptocurrency’s liquidity shrinks. As a result, even a small trading volume can have a large impact on price.
On-chain data from Santiment revealed that a single wallet address was a contributing factor to Bitcoin’s price retracement.
As we noted yesterday, there was an 11x exchange inflow spike that initiated #Bitcoin's price correction from its $58.3k #ATH. Further data combing revealed that an address was responsible for the 2nd largest $BTC transaction of the year, an import of 2,700 tokens to the wallet pic.twitter.com/CTgtJr27np
— Santiment (@santimentfeed) February 23, 2021
The user of the address in question withdrew 2700 BTC tokens, which amounted to nearly $160 million at the time, off the exchange to his individual wallet.
Image: Pepi Stojanovski via Unsplash
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