Crypto liquidations hit $550M as Bitcoin price dips below $84K

Bitcoin (BTC) dipped below $84,000 on Wednesday as flash downside liquidated over $500 million in crypto long positions.

Key points:

• Bitcoin briefly dropped to $83,560 but held support at its 21-day moving average, which currently stands at $83,850.
• Analysis flagged 40x-leveraged BTC shorts on Hyperliquid appearing immediately before the downside ensued. 
• Analysis by Rekt Capital viewed a daily or three-day close above $86,700 as necessary to confirm upside continuation.

Hyperliquid shorts in focus after BTC price drop

Data from TradingView showed BTC/USD falling up to 2.3% over two hourly candles before returning to circle $84,000 at the time of writing.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

The move came after overhead ask liquidity thickened on exchange order books, keeping spot price from rising past $86,500 on Tuesday. Cumulative 24-hour crypto long liquidations hit $550 million, per data from CoinGlass.

BTC/USD vs. crypto liquidations (screenshot). Source: CoinGlass

Just before the overnight drop, four wallets used stablecoin USD Coin (USDC) to open shorts on 148.49 BTC with 40x leverage on Hyperliquid, onchain data from Lookonchain and others reveals. 

After the long position flush, open interest (OI) immediately began to rebound across the 21 exchanges tracked by CoinGlass — potentially a sign that traders were comfortable with increasing BTC exposure at the local lows. OI increased from around $54.2 billion to $55.3 billion over six hours between 4 a.m. and 10 a.m. UTC.