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Bitcoin price falls below USD 19,000: Investors buy more

 


While the bitcoin price dips below $19,000 for a brief moment, the number of BTC wallets holding over one bitcoin is skyrocketing – even hitting an all-time high.


On September 6, 2022, bitcoin price fell to the nine-week low of around $18,900, sparking a buying frenzy . At the same time, the number of wallets with one to 10 BTC rose to over 750,000. The price last fell to a similar low of around $18,800 on July 3, 2022.


Since bitcoin was below $50,000 between late December 2021 and early January 2022, the number of wallet addresses holding 1 to 10 BTC has seen steady growth.


9-week low triggers massive liquidations

The price drop liquidated $77 million worth of bitcoin positions, including over $40 million in just an hour and a half . With the price falling to around $18,960, the majority of BTC liquidations happened . Crypto exchanges OKX and Binance released the liquidations of several cryptocurrencies yesterday. Binance had a total loss of $39.03 million and OKX $70.37 million.


Liquidation occurs when a trader uses leverage to add to their position but is then unable to cover it . This means that the trader deposits a minimum amount (margin) that is multiplied to build the leveraged position. For example, a trader with $500 margin and 50x leverage can enter a $25,000 position. This allows him significantly more z. B. to buy bitcoin. If the BTC price falls more than 2%, the loss is greater than the trader's margin. As a result, he can no longer cover his position and loses the initial $500 in a forced liquidation.Trading with leverage involves high risk, but also allows for high profits, with regulations dictating the amount of leverage available.


Until recently, Coinbase Pro offered its customers a leveraged trading product. However, as a result of an official measure, the platform was forced to withdraw this product from the market.


In contrast to forced liquidations, there is what is known as a margin call in traditional markets. Traders are asked to provide additional funds to cover their position.


Institutional acceptance of Bitcoin fuels wallet growth

Hedge fund billionaire Anthony Scaramucci sees institutional acceptance as a key factor in increasing the number of wallets holding 1 to 10 bitcoin . This factor is also decisive for the status of Bitcoin as an inflation hedge. According to companies like BlackRock, institutional interest in Bitcoin is high, even though the price is down nearly two-thirds since the November 2021 peak.


The British investment conglomerate Abrdn and the US company Charles Schwab have already made their first investments in the crypto market. Abrdn acquired a stake in crypto exchange Archax and Schwab launched a crypto exchange-traded product .


Disclaimer

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

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