Photo: Marco Verch (CC BY 2.0).
Traders who bet against bitcoin got run over Wednesday. As the biggest cryptocurrency climbed back from its election-night slide to top $81,000, about $950 million in leveraged crypto bets were wiped out in 24 hours – and 59% of the losses hit people wagering prices would fall, according to CoinGlass data reported by Unchained via Yahoo Finance.
Bitcoin traded near $80,500 late Wednesday morning, up 3.8% over 24 hours, a sharp U-turn from Tuesday night, when it dropped to about $75,600 as results showed Democrats winning both chambers of Congress. From that low to Wednesday morning’s high of $81,130, the climb was 7.3%. Ether rose even more, up 6.3% to about $2,437.
The pain was concentrated among short sellers – traders who borrow and sell, profiting only if prices drop. Of the bitcoin positions liquidated over the past day, 76% were shorts. One trader lost a $38 million bet on ether in a single order, the largest liquidation CoinGlass recorded.
The recovery had a clear leader: decentralized-finance tokens, the cryptocurrencies tied to apps that let people trade and lend without banks. CoinDesk’s DeFi index rose about 5%, the strongest of any sector it tracks, CoinDesk reported, while coins linked to President Trump fell. Even so, a widely watched fear-and-greed gauge sat at 37 – solidly in “fear” territory – a sign that everyday buyers have not rushed back in.
For regular investors, the lesson of the past 24 hours is an old one: borrowed money cuts both ways. People who used leverage to bet against bitcoin lost their stakes in hours, while those who simply held saw the dip erased by lunchtime.
The bigger question for crypto prices now sits in Washington. The Senate committees that write the industry’s rules pass to Democrats in January, and Democratic senators blocked the CLARITY Act – the bill that would have set national ground rules for crypto trading – earlier this session. Traders’ next test comes sooner: Friday’s U.S. jobs report, which shapes whether the Federal Reserve keeps cutting interest rates, a key driver of this year’s rally.
JBizNews Desk | New York
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