After Bitcoin crashed to $43,000, analysts pointed out that traders were over-leveraged

After the sharp drop in prices on September 7, traders were caught off guard. Bitcoin sees digital assets fall below $43,000 This led to extensive liquidation in the derivatives market, with more than US$3.54 billion in liquidation.

After the Labor Day holiday weekend in the United States, bullish sentiment has been on the rise because Bitcoin is officially recognized as El Salvador legal tender, But the celebration was quickly extinguished by the 16% drop of BTC.

Data from Cointelegraph Markets Pro with Transaction view It is shown that the sell-off of BTC started in the morning trading session and accelerated to midday, as the price of Bitcoin fell to a low of $42,837, and then buyers who bought on dips arrived to raise their bids above $46,500.

BTC/USDT 4-hour chart. source: Transaction view

Here is what traders think about this rapid sell-off and what to watch out for as the market tries to digest the chaos of the day.

With the sell-off of BTC, the bulls were liquidated in large numbers

On-chain analyst Willy Woo conducted a fact-centric analysis of current market conditions, and he released the following tweet outlining today’s development.

As Woo pointed out, the wider financial market opened up the day’s risk aversion, which puts pressure on the cryptocurrency market, which cascades over time.

The subsequent sell-off led to the liquidation of $1.1 billion worth of Bitcoin, but the on-chain data does not indicate that investors are eager to liquidate their positions. Recent activities indicate that the exchange has re-entered the buying mode.

Woo’s follow-up tweets showed how unexpected the market trend is today, which is a good reminder that in the cryptocurrency market, risk management always needs to be kept in mind.

Wu said,

“It’s not entirely certain that WTF just happened, but it’s a series of events. The sell-off mainly occurred in the derivatives market (like most crashes).”

Possible outliers detected

Market analyst and Cointelegraph contributor Michaël van de Poppe provided a further analysis of today’s Bitcoin trends. He also emphasized the role of over-leveraged traders in today’s price movements.

According to Poppe, if BTC can close above the range of US$47,000 to US$48,000 after this correction, then if the upward trend resumes, this move will be regarded as an abnormal value of the previously established trend and a good buying opportunity .

related: As the price of Bitcoin plummeted to $42,900, El Salvador bought on dips and bought

Not all traders are caught off guard

Not all market participants are ignorant of today’s downward trend, as highlighted in the following tweet by analyst and pseudonymous Twitter user Crypto_Ed_NL.

Subsequent tweets include the following chart, showing the scene as the Crypto_Ed_NL warned.

BTC/USDT 15-minute chart. source: Twitter

Crypto_Ed_NL said,

“BTC has reached the green box. Let’s see how it bounced back… I think it should be this correction.

The overall cryptocurrency market value is now 2.103 trillion U.S. dollars, and Bitcoin’s dominance rate is 42.1%.

The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Every investment and trading action involves risk, and you should conduct your own research when making a decision.