Bitcoin's price surged briefly, touching a new all-time high above the $69,000 mark on Tuesday. However, the peak was fleeting, and a swift pullback to the mid-$65,000 range led to a surge in the liquidation of leveraged positions.

Price volatility over the past 24 hours led to substantial liquidations of long positions on centralized exchanges. This volatility resulted in the liquidations of more than $197 million in bitcoin positions, with the majority ($108 million) being shorts, according to CoinGlass data.

Spike in crypto liquidations

Zooming out, the overall crypto market saw over $383 million of liquidated long positions in the last 24 hours, contributing to a total of $678 million in liquidations across major centralized exchanges, according to the data.

Liquidations take place when a trader's position is forcibly closed due to insufficient funds to cover losses. This happens when market move against the trader's position, resulting in the depletion of their initial margin or collateral.

Despite the pullback to the $65,000 range, Chainlink Co-Founder Sergey Nazarov suggests that the bitcoin market could be at the beginning of a new positive market cycle. "When bitcoin's price surges, it attracts more capital to the ecosystem, which fuels innovation and development within the space. At the same time, we're observing an alignment of macro-environmental factors that bolster bitcoin's growth. The interplay of global economic trends, regulatory evolution, and market dynamics is merging with the rise of bitcoin ETFs," Nazarov said in an email sent to The Block.

Diminishing bitcoin supply

This view concurs with that of Anchorage Digital CEO Nathan McCauley, who sees the bitcoin all-time high as marking a turning point for the crypto market. "Traditional institutions were once sitting out, but today, they are here in full force as the principal drivers of the crypto bull market," McCauley said in a note sent to The Block.

He highlighted the current positive underlying economics associated with the largest digital asset by market cap, citing higher demand indicated by ETF activity, and the upcoming halving contributing to a reduction in supply. "The industry used the bear market to build a more mature market structure, bringing traditional investment vehicles, like SEC-regulated ETFs, to crypto.  Now, we are seeing exactly what happens when the market has safe, secure, and compliant access to the asset class, and institutions are just getting started," McCauley added.

Major altcoins such as SOL, the native coin of the Solana network, and ether sustained their rally, making daily gains of 2.5% and 3.5% respectively, according to The Block's Prices Page.

The largest digital asset by market cap has decreased by over 2% in the past 24 hours, changing hands for $65,117 at 11:57 a.m. ET. 

The GM 30 Index, representing a selection of the top 30 cryptocurrencies, has increased by 0.24% to 141.46 in the past 24 hours.

Bitcoin BTC -1.10% reached a new all-time high before posting a sharp pullback. Image: The Block.