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The collapse of the $10 billion crypto hedge fund 3AC sent shockwaves through the cryptocurrency market in 2022.
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Bitcoin is steadily trading above the key $95,000 psychological support despite one of the largest intraday selling events since 2022.
Bitcoin’s (BTC) price staged a significant reversal after it briefly bottomed at an over one-week low of $94,726 on Feb. 9, Cointelegraph Markets Pro data shows.
BTC/USD, 1-month chart. Source: Cointelegraph
Bitcoin proved significant price resilience, considering that it witnessed the largest daily selling pressure since the collapse of Three Arrow Capital (3AC), according to André Dragosch, head of research at Bitwise Europe.
The research lead wrote in a Feb. 10 X post:
“We have just reached the highest amount of selling pressure on Bitcoin spot exchanges since the collapse of 3AC in June 2022. Yet, the price is still close to $100,000.”
Bitcoin’s price resilience may signal “seller exhaustion,” added the researcher.
BTC: Intraday spot buying minus selling volume. Source: André Dragosch
The collapse of 3AC, a Singapore-based crypto hedge fund that once managed over $10 billion worth of assets, sent shockwaves through the cryptocurrency market in 2022.
3AC exchanged roughly $500 million worth of Bitcoin with the Luna Foundation Guard or the equivalent fiat amount in LUNC just weeks before Terra imploded.
The series of liquidations for 3AC had a catastrophic impact on crypto lenders such as BlockFi, Voyager and Celsius. Many of the crypto lenders had to eventually file for bankruptcy themselves due to exposure to 3AC.
Related: Austin University to launch $5M Bitcoin fund with 5-year HODL strategy: Report
Bitcoin momentum hinges on $93k support due to $1.7B in liquidations
Bitcoin investor sentiment remains pressured by global trade war concerns following new import tariffs announced by the United States and China.
While Bitcoin did temporarily fall below $95,000, a correction below the key $93,000 support may cause significant downside volatility due to the growing crypto market leverage.
Bitcoin exchange liquidation map. Source: Coinglass
A potential Bitcoin correction below $93,000 would liquidate over $1.7 billion worth of cumulative leveraged long positions across all exchanges, Coinglass data shows.
Related: Kentucky joins growing list of US states to introduce Bitcoin reserve bill
A correction below the $93,000 support level may trigger a further decline to $91,500, Ryan Lee, chief analyst at Bitget Research, told Cointelegraph.
Escalating trade war tensions could increase economic certainty, which may push Bitcoin below $90,000 in the short term, despite Bitcoin’s status as a hedge against traditional finance volatility.
Meanwhile, market participants await President Donald Trump’s upcoming discussions with Chinese President Xi Jinping, which are aimed at resolving trade tensions and avoiding a full-scale trade war.
Trump was scheduled to meet President Jinping on Feb. 11 but reports citing unnamed US officials suggest that the meeting would be delayed, according to a Feb. 4 WSJ report
Magazine: BTC above $150K is ‘speculative fever,’ SAB 121 canceled, and more: Hodlers Digest, Jan. 19 – 25
This article first appeared at Cointelegraph.com News
