Sudden Cryptocurrency Crash Results in Massive $860M Liquidation in 24 Hours
Summary:
On April 12, Bitcoin (BTC) saw a sudden 5% drop, leading to over $400 million losses in an hour for traders with leveraged positions in cryptocurrencies. Ether (ETH) also saw an 8% fall. The flash crash erased more than $417 million in leveraged positions, with a major part being Bitcoin and Ether longs. Binance saw the most liquidations valued at $171 million. Over the past 24 hours, total liquidations hit $860 million among 270,993 traders. This happened simultaneously with a dip in U.S. stock markets following inflation rate rises for the third consecutive month.
On April 12, Bitcoin's (BTC) value took an unexpected plunge of 5%, resulting in over $400 million losses within an hour for those trading with leveraged Bitcoin and other digital currencies. In this striking one-hour dip, BTC went from $68,341 down to a low of $65,110 during late trading hours in New York.
Ether (ETH), the runner-up in the crypto market in terms of capitalization, mirrored Bitcoin's downturn, shedding 8% of its value, moving from an initial $3,553 to a lower $3,226.
Data sourced from Coinglass attributed Bitcoin's sharp decline to the elimination of over $417 million in leveraged positions during that hour, with the larger portion being Bitcoin and Ether longs valuing over $77.93 million and $63.35 million respectively.
Binance witnessed the bulk of short and long liquidations of $171 million, followed closely by traders on the OKX crypto exchange who faced collective losses amounting to $158 million.
Coinglass further reported a whopping $860 million in total liquidations across 270,993 traders in the preceding 24 hours.
This downward spiral coincided with a slump in U.S. stock markets after recent data indicated that inflation rates had risen for the third consecutive month. The inflation spike, higher than anticipated, discouraged any optimism rooted in the Federal Reserve's interest rate cuts this year. As concerns rise over the struggles with managing the high price levels, Jamie Dimon, CEO of JPMorgan Chase, noted the continual threat to the promising economic outlook.
Emphasizing the ongoing inflation, geopolitical tensions, and the Federal Reserve's Quantitative tightening measures, Dimon stated that the full impact of quantitative tightening at this level is yet to be experienced. Issuing a warning, he conveyed that the likely persistence of these inflationary pressures are set to heavily influence the market.
This news does not provide financial advice nor recommendations. Investing and trading entail risks, so readers should undertake their own research prior to making any decisions.
Published At
4/12/2024 11:59:30 PM
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