Bitcoin experienced significant volatility, surging past $106,000 before falling back to $103,000, resulting in the liquidation of over $600 million in crypto positions. This sudden price action wiped out $460 million in long positions and $220 million in shorts from futures involving major cryptocurrencies like Ethereum, Solana, and Dogecoin. The fluctuations were primarily driven by a short squeeze and profit-taking amid ongoing macroeconomic uncertainties, including a U.S. credit rating downgrade and inflation fears. The abrupt price changes occurred late on Sunday during low weekend liquidity, highlighting forced trading activities. As Bitcoin struggles to maintain a hold above the critical $106,000 mark, traders are wary of potential volatility, especially in light of pending U.S. fiscal policies and looming debt concerns. Despite a recent cycle of institutional inflows into cryptocurrencies, the market remains cautious as it adjusts to the rapidly shifting economic landscape.

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