Crypto's "Valentine's Day Massacre" Is Over - BTC, ETH Surge Back Near Record Highs

As the world's residents celebrated their love for one another, there was blood on the streets of cryptoville overnight.

Bitcoin crashed $3,500, back below $46,000 after hitting new record highs earlier in the day, and Ethereum was monkey hammered almost $200 back near $1650.

But as America woke to celebrate Washington's birthday, a wave of buying ripped crypto markets higher with Bitcoin back above...

(Click on image to enlarge)

Source: Bloomberg

And Ethereum back up near $1850...

(Click on image to enlarge)

Source: Bloomberg

So what sparked the 'Valentine's Day Massacre'? CoinTelegraph's Joseph Young notes that more than $1.89 billion worth of cryptocurrency futures positions were liquidated over the past 24 hours as Bitcoin and Ether sharply dropped.

Most of the liquidations came from Bitcoin and Ether, which accounted for $555 million and $336 million, respectively. But altcoins like XRP, EOS, and Litecoin (LTC) also saw large liquidations as the market plummeted.

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Liquidations across crypto exchanges. Source: Twitter @CryptoRank_io

The lion's share of the liquidations happened on Binance, while Bitfinex saw the least. This suggests that the former may have the biggest share of novice traders, according to Bitfinex chief technology officer Paolo Ardoino.

"Bitfinex has almost 1B in open interest but extremely low liquidation rate compared to competition," explained Ardoino.

"Finex seems to have traders that use leverage slightly more carefully."

Additionally, according to Ki Young Ju, CEO of CryptoQuant, a recovery was likely because there are enough stablecoin reserves in the cryptocurrency exchange market to trigger another leg up for Bitcoin.

In the crypto market, sidelined capital is often stored in stablecoins rather than cash or in bank accounts because they are much easier and faster to deploy on exchanges. Ju said that it is an ideal time to buy Bitcoin, given that a newfound rally is more likely. He wrote:

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Howie Sandberg 3 weeks ago Member's comment

It's not over till the fat lady sings....