Recent downturn in crypto markets saw $120billion taken out of total market cap within a matter of hours. The market panic caused investors to sell off their shares in an attempt to avoid further losses. As a result of the downtrend, over 110k traders suffered losses totaling hundreds of millions of USD.
430 million lost by traders
A major liquidation event occurred in the crypto market on Thursday, 2022. The news that interest rates were increasing by 50 basis points at the FOMC meeting on Thursday led to bitcoin’s price falling below $37,000. It would have been a difficult day for crypto traders that had just seen their trades renegotiated into hundreds of millions.
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Most liquidations involved long liquidations of traders who placed bets about the positive future price for various cryptocurrencies. As the market continues to fall, the liquidations would also continue to cause ripples. There have been over $430 million liquidations within the past 24 hours.
Crypto liqudaitions surpass $430 million | Source: Coinglass
The liquidations of bitcoin were a clear sign that the cryptocurrency led the market. This pioneer cryptocurrency, which traders love because it is the most popular on the market, saw more than 200 million traders liquidated in a matter of hours. Although 70% of liquidations were long, short traders weren’t left behind in the chaos.
Ethereum, which has $69 million worth of liquidations, is the leading altcoin. There were also other important players within the industry who witnessed traders go above and beyond what they expected.
Both APE and GMT, coins which have been in high demand lately saw liquidations of more than $12,000,000 dollars each. Some may argue that the APE liquidations were caused by the hype surrounding billionaire Elon Musk’s Twitter profile change to BAYC avatars.
Loss of $120B in crypto market capital | Source: Crypto Total Market Cap on TradingView.com
It is still a very sad day for market. The market has been experiencing a lot of fear and low sentiment. Even more concerning is that bitcoin currently lies at dangerously low levels of the $36,000 to $38,000 support level.
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It is crucial that bulls keep the bitcoin price above $36,000 as it will set the digital currency on a downward trajectory to $30,000. This will be a major selling point for bulls. A fall below $36,000 could lead to the digital asset falling below $30,000.
Featured image taken from Physics World. Chart from TradingView.com
