On early Tuesday, Bitcoin's price plunged more than 10% after El Salvador announced recognizing the main cryptocurrency as legal tender.
Bitcoin's slide from Monday accelerated, according to CoinMarketCap, as the cryptocurrency failed to hold the $50,000 price barrier, falling from $51,000 to $44,700 in a single hour. According to data from ByBt, the abrupt sell-off resulted in $1.44 billion in futures liquidations of Bitcoin contracts in the last 24 hours.
Huobi-BTC had the single largest known liquidation, at $43.7 million at the time. Longs made up the great majority of the liquidations, accounting for roughly 88 percent of all liquidations.
Bitcoin's price has risen to as high as $47,500 after falling to weekly lows. BTC is hanging around $46,500 on key exchanges Binance, Coinbase, and Huobi at writing.
El Salvador's president, Nayib Bukele, tweeted that he is "[b]uying the dip," adding 150 BTC worth around $6.9 million to his 400 BTC holding. The typical price tag for the purchase appears to be around $46,000.
Is this the “Reset” Bitcoin requires to resume its upward trend?
According to Glassnode data, the average Bitcoin funding rate (across all exchanges) grew steadily throughout August.
The funding rate increased from 0.015 percent in early August to 0.03 percent in early September.
Exchange of derivatives In late August, ByBit's funding rate climbed as high as 0.085 percent.
High funding rates may suggest that the market is overheated and that too many traders are overleveraged. High financing rates almost always result in a retreat, as was the case earlier this month.
At the height of the sell-off, financing rates on key exchanges Binance and Huobi fell to 0.023 percent and 0.021 percent, respectively. According to Bybt, OKEx has reverted to a negative funding rate of -0.009 percent.
Funding rates for Binance, Huobi, and ByBit have stabilized around 0.01 percent as Bitcoin and the broader crypto market has recovered marginally from the sell-off. On OKEx, the funding rate is still negative at -0.0005 percent.
With the futures market cooling, price levels are anticipated to begin to settle once more.
