On April 12, the crypto market experienced an unexpected slump. The prices of Bitcoin and major altcoins suddenly dropped, leading to significant sell-offs or liquidations. The cause of this sudden price decrease is unclear, with several potential explanations being suggested. One possibility is that the decline was triggered by a recent correction in the US stock markets.
Almost $500 Million Liquidated In An Hour Amidst Crypto Flash Crash
Based on information from CoinMarketCap, Bitcoin dropped by 4.49% in the past day, reaching a low of $66,052. In response, Ethereum and Solana experienced losses of 8.12% and 12.16% respectively, following Bitcoin’s downward trend.
Previously mentioned, the net loss resulted in approximately 277,843 traders being liquidated, totaling $877.21 million in crypto assets over the past 24 hours according to Coinglass. Long positions accounted for about $782.98 million of those losses, while short traders experienced a relatively smaller loss of around $94.24 million.
Significantly, over $467 million worth of leveraged positions were terminated in just an hour due to a widespread price drop. The largest amount of these terminations, totaling $369.85 million, took place on Binance. Meanwhile, the biggest liquidation order valued at $7.19 million was processed in the ETH-USD market on OKX.
Coinglass
It’s worth noting that Bitcoin’s price drop aligned with a fall in the US stock market last month. The S&P 500 index dipped by 1.6%, reaching a low of $5,108. This market downturn followed closely on the heels of newly released Consumer Price Index (CPI) data. This data indicated that inflation had increased by 3.5% year over year in March.
The US Federal Reserve (Fed) may not be making any interest rate reductions imminently based on these reports, as they are focused on keeping inflation close to their 2% objective. This outlook is gloomy for the crypto market at large because Fed rate cuts often encourage investors to explore riskier assets like Bitcoin with promising returns.
Bitcoin Experiences Network Growth As Halving Approaches
In a more optimistic outlook, the number of non-empty Bitcoin wallets on its network has grown by 370,000 in the past six days leading up to the Halving event on April 19th. According to blockchain analysis firm Santiment, this trend suggests that investors are actively accumulating Bitcoin, a behavior that is expected to continue during the Halving event.
Currently, Bitcoin is priced at $66,882 during this writing, marking a significant daily trading volume surge of 44.80%, amounting to $43.80 billion. Yet, Bitcoin’s price performance has been lackluster in the recent past, with a 1.33% decrease over the last week and a more substantial 6.20% drop over the last month.
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2024-04-13 11:46