Ethereum
Panic in the cryptocurrency market: Bitcoin and Ethereum collapse…
4:00 p.m. ▪ 3 min read ▪ by Luc Jose A.
A shockwave is shaking the cryptocurrency world. In a matter of hours, Bitcoin has fallen by 8%, Ethereum by more than 10%, and millions of dollars of long positions have been liquidated. As traders try to understand the reasons for this sudden drop, concerns are growing about the large movements of funds linked to Mt. Gox, the defunct exchange platform.
A Dizzying Fall for Bitcoin and Ethereum
The cryptocurrency market was hit by a $580 million liquidation wave, a direct result of an 8% drop in Bitcoin and similar declines in Ethereum, Solana and Dogecoin. Long trades on Bitcoin and Eth saw losses exceeding $380 million, with the largest liquidation seen on Binance, where an Ethereum transaction worth $18.4 million was force-closed.
These massive liquidations resulted from highly leveraged positions that traders were unable to maintain in the face of sudden price drops. Parts analysis This led to one of the largest liquidation waves of the year. In addition, open interest, which measures the number of unsettled bets on futures contracts, fell by 12%, signaling an outflow of capital from the market. This increased volatility reflects a sense of panic among investors, exacerbated by external factors such as the Mt. Gox-related fund movements and government decisions influencing the market.
Market dynamics, regulatory developments, and macroeconomic factors all play a vital role in Bitcoin’s price movements. Staying informed and agile is essential for those involved in the market.
Nickolas Hoog, Vice President of Marketing at BitMart
The role of Mt. Gox and other triggers
In anticipation of repayments to creditors, Mt. Gox has moved more than $2.7 billion in bitcoin to a new address. The move has raised fears of increased selling pressure, amplifying the price drop.
At the same time, the German government’s decision to liquidate part of its bitcoin holdings added a layer of uncertainty to the markets. Traders, already nervous about macroeconomic uncertainties and the upcoming US presidential elections, responded by selling their positions en masse. This massive liquidation led to significant losses for overleveraged positions, particularly on platforms like Binance, where an Ethereum/USDT trade worth nearly $19 million was liquidated.
This increased volatility and falling prices have generated a sense of fear among investors, with the Fear and Greed Index plunging to alarming levels. The market outlook remains uncertain in the short termanalysts are anticipating a difficult third quarter, marked by increased investor caution and persistent volatility.
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Luc José A.
A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I made a commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, decipher market trends, relay the latest technological innovations and put into perspective the economic and societal challenges of this ongoing revolution.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be considered investment advice. Do your own research before making any investment decision.