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06/08/24
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Crypto Markets Crash: $1 Billion in Liquidations as Bitcoin Plummets Over 15%
The cryptocurrency derivatives market has recently experienced significant turmoil, with over $1 billion in liquidations occurring within the last 24 hours as Bitcoin’s price plummeted to approximately $51,500. The decline represents a startling drop of over 15% for Bitcoin, signaling growing concerns among investors and a shift in market momentum.
Bitcoin’s decline is part of a broader downward trend that has escalated since late July. On July 29, the cryptocurrency asset was trading around the $70,000 level, indicating a substantial decrease of more than 26% within just a week. The current price marks a return to levels not seen since prior to a rally in late February, which had previously set a record high for the asset.
While Bitcoin’s significant decline has caught attention, the impact on altcoins has been substantial as well. Ethereum has faced a loss of around 23%, followed closely by BNB, which dropped 19%, and Solana with a 21% decrease. The widespread downturn across the sector underscores the volatility that has characterized the cryptocurrency market recently.
The resulting market instability has led to a staggering $1.1 billion worth of cryptocurrency derivatives contracts being liquidated. The majority of these liquidations—approximately 85%—pertained to long positions. This trend aligns with the market’s overall downturn, suggesting that many investors are facing significant losses.
Interestingly, despite the overall market crash, a notable $173 million in short positions were also liquidated, indicating that some investors may have hesitated to capitalize on bearish trends. Additionally, Bitcoin and Ethereum contributed equally to the liquidation event, with liquidations amounting to $367 million for Bitcoin and $350 million for Ethereum. This unexpected balance in the liquidations highlights the increased attention on Ethereum, partially fueled by recent developments such as the launch of spot exchange-traded funds, which have raised its profile among investors.
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