Bitcoin’s price surged close to $40,000, resulting in short sellers facing losses of over $100 million in the last 24 hours.
Interestingly, while the overall cryptocurrency market experienced positive momentum, the gains were not reflected in the supply of wrapped Bitcoin (wBTC) on the Ethereum network.
Crypto Market Witnesses Over $140 Million in Liquidations Amid Bitcoin Surge
The recent surge in the cryptocurrency market caught many traders off guard, resulting in over $140 million in liquidations. Notably, short sellers bore the brunt of the losses, with over $110 million in liquidations within a 24-hour period. This marked the second-largest amount of short liquidations since mid-November.
Bitcoin and Ethereum traders faced substantial liquidations, totaling $36 million and $32 million, respectively. Solana traders also experienced over $6 million in liquidations as SOL briefly surged beyond $65, reaching its highest price point since May 2022.
Crypto Market Liquidation. Source: CoinGlass
Among crypto exchanges, Binance recorded the most significant losses at $53.44 million, followed by OKX at $51 million.
These liquidations coincided with Bitcoin’s ongoing rally, with technical analysts suggesting new resistance at $40,000 and strong support around $38,000. This development hints at a potential altseason on the horizon, prompting traders to consider rotating to altcoins. Koroush AK, a notable analyst, pointed out that Bitcoin hasn’t seen a red weekly candle for two months.
Bitcoin Thoughts
1. $38k breakout successful
2. New resistance $40k, new support $38k.
3. Time to rotate to altcoins again, especially ones that break local highs. I'll share what I find on telegram today.
4. We haven't had a red weekly candle for 2 months lol
— Koroush AK (@KoroushAK) December 3, 2023
Wrapped Bitcoin (wBTC) Supply on Ethereum Declines Despite BTC’s Rising Value
In November, the supply of Wrapped Bitcoin (wBTC) on the Ethereum blockchain decreased by over 2%, equivalent to more than 3,000 BTC. This decline suggests muted demand for BTC on the ETH network, despite Bitcoin’s increasing value.
Analysis of the wBTC order book reveals a trend of more burning than minting over the past month. The current data shows 160,286 wBTC against 160,293 BTC held in custody.
Wrapped Bitcoin Supply. Source: Glassnode
Research analyst Tom Wan from 21co attributes this balance decline to a reduced appetite for decentralized finance (DeFi) and the emergence of BRC-20 on the Ethereum network. During the peak of its supply, wBTC saw high demand as investors utilized it in various DeFi activities. However, as several DeFi protocols struggle to regain previous levels of activity, the demand for wBTC has diminished.
Supply of WBTC decreased by 3,456 (-2.16%) despite the increase in BTC price (+10.8%) in November
My 2 cents on Potential reasons:
1. DeFi appetite hasn't fully picked up yet. The TVL on Ethereum is still down 75% compared to ATH2. The new use cases on Bitcoin and Stacks: BTC… pic.twitter.com/s8yxRfBbG0
— Tom Wan (@tomwanhh) December 1, 2023
“Supply of wBTC decreased by 3,456 (-2.16%) despite the increase in BTC price (+10.8%) in November. DeFi appetite hasn’t fully picked up yet. The TVL on Ethereum is still down 75% compared to ATH,” explained Wan.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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