Major Crypto Market Correction: Nearly $200 Million Liquidated Amidst Bitcoin and Ethereum Price Drops
Summary:
Bitcoin and Ethereum faced significant drops on June 11, causing a notable dip in leveraged trades that led to the liquidation of nearly $200 million. The significant drop in the crypto market also resulted in the liquidation of 83,912 investors over the past 24 hours. The largest liquidation was observed on OKX - ETH-USDT-SWAP with a value of $5.21 million. This substantial correction in the market is linked to the forthcoming May Consumer Price Index (CPI) report and the Federal Open Market Committee (FOMC) meeting on June 12.
On June 11, a 2.5% dip was seen in Bitcoin's value, slipping from a daily record of $69,547 to hit $66,018. Ethereum didn't fare too well either, recording a 2.58% decrease to settle at $3,500. This downward trend in the digital currency sphere left a notable dent on leveraged trades, wiping off roughly $200 million. CoinGlass, the crypto analytic company, reported that over the previous day, 83,912 investors faced liquidation, totaling to a substantial $190.97 million. An exchange will liquidate a leveraged position when a trader cannot meet margin requirements or exhausts funds to keep the position afloat, often leading to a partial or full loss of the initial “margin.” The single largest liquidation was seen on OKX - ETH-USDT-SWAP, worth $5.21 million.
Bitcoin (BTC) traders bore the brunt of this, registering a $46.9 million liquidation in the last 24 hours including $36.8 million in long positions and $14.07 million in short trades. Ethereum (ETH) traders were the second most affected with a total liquidation of $41.0 million - $31.3 million being long liquidation, and $9.68 million in short liquidation.
The significant liquidation follows closely behind the market's $400 million record liquidation on the previous Friday. This string of market corrections and the resulting havoc in the leveraged market can be tied to the upcoming May Consumer Price Index (CPI) report and Federal Open Market Committee (FOMC) meeting on June 12.
Traders are now sitting tight for the CPI data and FOMC rate updates. Historically, these have triggered extreme fluctuations in the crypto market as investors scramble to adjust risk. Currently, there is the highest correlation between the US stock market and the crypto market, not seen since 2022. Notably, when CPI escalates, Bitcoin usually sees a fall in price - and this applies to the wider digital asset market as well. With rising costs of essential commodities, there is less extra cash to spare and therefore less funneled into investments. Reports suggest that the FOMC is predicted to hold the rate unaltered, maintaining the reference lending rate at 5.25-5.50%, while CPI data is projected to stay within the 0.1%-0.3% range.
Published At
6/12/2024 11:53:41 AM
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