The crypto market started the new month of May in red, with Bitcoin’s price plunging to a two-month low of under $56,500.
This decline extends the downtrend from April, marking Bitcoin’smost challengingt month since the November 2022 crash triggered by the collapse of the FTX exchange.
Red market
According to CryptoSlate’s data, Bitcoin’s price sank by approximately 8% in the past 24 hours but has slightly rebounded to $57,115 as of press time.
Bitcoin’s slide mirrors a broader market trend, with major cryptocurrencies like Solana, Ethereum, Cardano, and Avalanche each seeing losses exceeding 7% during this period.
During this timeframe, Polkadot’s DOT token stood out among the top 20 cryptocurrencies by market cap, recording a modest gain of 0.41%.
Analysts attribute this market movement to the hawkish policy shifts in the United States and dwindling interest in spot Bitcoin ETFs despite their recent launch in Hong Kong.
However, Markus Thielen, head of research at 10x Research, highlights a distinctive aspect of this market correction. He said:
“This correction is very different, as institutional investors have a risk management approach that differs from most retail traders. Based on our estimates, the average entry price of the US Bitcoin ETF holders is approximately $57,300—potentially even 1-2% higher – a level that Bitcoin prices are approaching fast.”
Traders liquidated for over $450 million
Coinglass data shows that the market rut liquidated more than $450 million worth of positions held by 133,000 traders.
A breakdown of the liquidations showed that long traders betting on price increases suffered the most, with approximately $390 million lost. On the other hand, short traders with a more pessimistic view of the market were liquidated for $65 million during the period.
Bitcoin traders suffered the most significant losses, totaling $163 million, with $142 million attributed to long traders and $20.95 million to Short traders. Ethereum closely followed with liquidations amounting to approximately $115 million.
Remarkably, the largest single liquidation occurred on OKX, involving an ETH-USDT transaction valued at $6.07 million.
Traders speculating on Solana and Dogecoin prices also suffered double-digit liquidations totaling about $17 million and $15 million, respectively.
As of press time, Bitcoin has attempted a recovery, trading at around $57,500. However, low liquidity and a wealth of short leverage continue suppressing the price.
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