Bitcoin experienced a $16,700 plunge on Friday, marking a 13.7% correction in less than eight hours. Liquidations reached $5 billion, highlighting risks of illiquid collateral assets. Despite steep losses, these figures are not uncommon in Bitcoin’s history, with 48 other days of deeper corrections. Source: TradingView / Cointelegraph.

Volatility remains high post-spot Bitcoin ETF, with intraday crashes of 10% or more still occurring. Recent corrections include a 15.4% drop on Aug. 5, 2024, and a 13.3% correction on March 5, 2024. Friday’s $5 billion in Bitcoin futures liquidations suggests it may take time for the market to stabilize. Source: X/CoinMamba.

During the crash, some altcoins plunged 40% or more, triggering a collapse in traders’ collateral. Bitcoin perpetual futures traded about 5% below BTC/USD spot prices and have yet to recover. This discrepancy poses challenges for market makers to return to normal conditions. Source: TradingView / Cointelegraph.

Friday’s crash could be due to thin liquidity over the weekend, compounded by US bond markets being closed on Monday for a national holiday. Other factors include insolvency rumors and cautious market makers avoiding additional risks. It may take days for the derivatives market to assess the damage and determine Bitcoin’s future trajectory.

Read more at Cointelegraph: Simmer Down, Bitcoin Is Going To Be Ok: Look At The Data