Bitcoin experienced a flash crash with prices dropping from $103,500 to $90,500 within a short window, causing significant market volatility. Although the cryptocurrency quickly rebounded to $98,000, it remains 5% below its recent high.
The crash caused chaos in the derivatives market, as $893 million in positions were liquidated in the past 24 hours. Notably, 82% of these liquidations involved long positions, illustrating the effect of the bearish market action on leveraged contracts.
This event is characterized as a "long squeeze," highlighting the vulnerability of leverage-driven market rallies to sharp downturns. The Open Interest increased by over 15% during Bitcoin's recent rise, indicating substantial leverage involvement, which magnified the crash's intensity.
