Bitcoin Surges Past $89,000, Hitting a New All-Time High, While 170,000 Users Face Liquidation!

Bitcoin Surges Past $89,000, Hitting a New All-Time High, While 170,000 Users Face Liquidation!On November 11th, Eastern Time, Bitcoin prices continued their rally, breaking through the $89,000 mark and nearing the $90,000 threshold. The global cryptocurrency market capitalization also surpassed its previous all-time high set in November 2021

Bitcoin Surges Past $89,000, Hitting a New All-Time High, While 170,000 Users Face Liquidation!

On November 11th, Eastern Time, Bitcoin prices continued their rally, breaking through the $89,000 mark and nearing the $90,000 threshold. The global cryptocurrency market capitalization also surpassed its previous all-time high set in November 2021. As of this writing, Bitcoin is trading at $85,620 per unit, with over 170,000 users facing liquidation within the past 24 hours.

The recent trend is relatively clear, making a bullish approach a more prudent strategy. Mr. Li, a Bitcoin investor, shared that he invested $880,000. While he experienced losses in the past, he witnessed a significant increase in his portfolio value during the last three days. Conversely, Ms. Chen faced a different outcome in recent transactions, resulting in the loss of her entire investment.

The surge in Bitcoin prices is accompanied by a parallel rise in trading volume and market fluctuations. Cryptocurrency exchange background verification personnel indicated that since the latter half of October, they have witnessed a dramatic increase in account verification requests and transaction flow verification requests. Trading volume has likely doubled, if not more, compared to the previous August.

High-leverage trading is a key driver of liquidations. The exchange personnel pointed out that unlike investments in stocks, funds, and other assets, Bitcoin trading primarily involves leverage strategies. This is particularly prevalent during periods of market growth when investors tend to increase their leverage. The platform they work at allows for leverage multipliers ranging from 1X to 200X. They observed that during normal market conditions, investors typically use leverage multipliers of 20X to 50X. However, in the past two days, leverage multipliers exceeding 100X have become commonplace, leading to numerous cases of liquidation. For example, with a 100X leverage multiplier, if the Bitcoin price moves in the opposite direction of the held position, even a mere 1% fluctuation can trigger liquidation.

Reflecting on his investment journey, Mr. Li, a finance graduate, shared that he held successful positions in both the US stock market and crude oil futures. However, influenced by colleagues, he started trading Bitcoin. He admitted that he was initially bearish on Bitcoin earlier this year, holding onto this viewpoint for several trading days. However, as Bitcoin's price continued to rise, he lost nearly half of his virtual currency holdings. Ultimately, through a shift in perspective and a bit of luck, he managed to double his initial investment.

Mr. Xu, another trader, who has been trading Bitcoin for over six years, acknowledged that he lost nearly all his funds within a single week and witnessed his assets doubling in a single day. He emphasizes that Bitcoin trading, with its volatility and leverage mechanisms, makes doubling your investment easier but carries massive risk.

Bitcoin trading offers both long and short positions, which can be executed through spot trading and contract trading. Spot trading involves buying or selling Bitcoin on an exchange at the prevailing market price. Contract trading allows traders to buy or sell Bitcoin at a predetermined price on an exchange. Contract trading supports leverage trading, allowing traders to borrow funds using a small margin deposit, enabling them to control a larger position. While this presents the potential for higher returns, it inherently elevates the risk.

A reported 170,000 users have faced liquidation, with some experiencing total asset loss. Mr. Li remarked that Bitcoin trading's leverage mechanisms make achieving "financial freedom" more attainable compared to other industries, but it also carries the risk of losing everything.

Data from Coinglass reveals that over 170,000 virtual currency users have faced liquidation in the past 24 hours, totaling $651 million in lost funds. Ms. Chen shared that she has already faced liquidation three times in the past two weeks. Each time, she felt the timing was right, but Bitcoin's "rollercoaster" price action, with quick rebounds and corrections, often left her unable to make timely trading decisions.

Ms. Zhao highlighted that online forums frequently display posts celebrating profits, while those who experience losses often remain silent, creating a survivorship bias. She began trading virtual currencies during her university years, starting with an initial deposit of $2,000. Within ten days, she managed to increase her holdings to nearly $10,000. She continued to invest but eventually lost everything, approximately $100,000, due to a miscalculation.

Mr. Zhao attributed his liquidation to a high leverage strategy coupled with a short-term misjudgment. Limited available funds prevented him from capitalizing on the recent market uptrend.

The recent surge in Bitcoin can be attributed to "catalysts" like Trump's trading stance and loose monetary policy. During his campaign, Trump voiced support for digital assets, pledging to make the US the global cryptocurrency hub if re-elected. He promised to establish a strategic Bitcoin reserve and appoint regulators friendly to digital assets. These policy statements have boosted market confidence in Bitcoin's future growth, suggesting that a more favorable regulatory environment will foster further development in the digital asset market. Additionally, global central banks' shift toward looser monetary policies has boosted risk appetite, providing tailwinds for cryptocurrencies. Furthermore, widespread market predictions of potential post-election inflation in the US have objectively fueled this recent Bitcoin rally.

Analysts point out that Bitcoin's first approach to $90,000 is fueled by Trump's embracing of digital assets and the prospect of numerous congressional members supporting cryptocurrencies. From a liquidity perspective, the market anticipates further interest rate cuts by the Federal Reserve. Looser dollar liquidity also benefits cryptocurrencies. This suggests that Bitcoin may still experience an upward trend in the short term.

Cryptocurrency researchers emphasize that Bitcoin is not a market designed for the average customer. As a nascent investment product, its market risk remains relatively high, and the possibility of significant price fluctuations still exists. Investors must be mindful of the associated risks.