In the world of cryptocurrencies, often marked by unpredictability and dramatic changes, the last few hours have brought exceptional turbulence. Bitcoin, the most recognizable of the digital currencies, experienced a dramatic drop below the $39,000 mark, triggering an avalanche of liquidations across the broader cryptocurrency market, amounting to $115 million in just one hour.
In the last 24 hours, the price of Bitcoin plunged sharply, reaching a value of $38,550 at 3:35 PM Polish time. This resulted in a significant decrease in market capitalization, which currently stands at about $769 billion. The pressing question is, what is the cause of these major changes? The impact on these events may have been influenced by the upcoming U.S. Treasury announcement regarding quarterly refunds, as suggested by BitMEX co-founder Arthur Hayes. In his opinion, the current price trend of Bitcoin may continue until the end of the month.
Ethereum, the second-largest cryptocurrency, also experienced a 6% drop, bringing its value down to $2,230. The reasons for this situation can be attributed to significant sell-offs by the Ethereum Foundation and associated fund transfers from the troubled cryptocurrency institution Celsius.
Interestingly, data from Coinglass reveal that traders betting on market rises suffered colossal losses. In just one hour, they lost $115 million, and extending the timeframe to 24 hours, these losses increased to nearly $300 million. For comparison – those betting on declines suffered losses of $38 million.
The most affected were Bitcoin traders, losing over $80 million, with more than 60% of these losses coming from long positions. The largest single liquidation was $5 million on a Bitcoin price increase on the Bybit platform.
Similarly, Ethereum traders struggled with total liquidations of about $70 million, with the majority of losses – about $60 million – coming from those who bet on the rise of ETH price.
Furthermore, traders of other major digital currencies also experienced significant losses, with liquidations in Solana, XRP, Dogecoin, and Ordinal amounting to $16 million, $4 million, $5 million, and $6 million, respectively.
Looking at the exchanges, Binance, the largest cryptocurrency exchange in terms of trading volume, recorded trader losses of $98 million. OKX reported liquidations totaling $71 million. Other cryptocurrency platforms, including ByBit and HTX, witnessed a total loss among their traders reaching $63.52 million.
These events shed light on the instability and risk associated with investing in cryptocurrencies. Another day in the digital market brings new challenges, and investors must be prepared for every scenario. Cryptocurrencies, while offering enormous potential, constantly remind us of their volatile nature.
