Writer: ONYEKACHI PAUL
According to Coinglass data, a staggering 176,752 traders found themselves liquidated within the last 24 hours. Now you are beginning to understand why #BitcoinCrash is trending on X (formerly Twitter).
This casts doubts on Finder’s BTC price predictions that Bitcoin is set to peak at $42K this year.
As #BitcoinCrash trends, the cumulative value of these liquidations has reached an estimated $1 billion. This is the biggest liquidation in the last eight months.
As of the time of my writing, Coinmarketcap data reveals that BTC is currently hovering slightly above $26,000.
Etherium, also known as ETH, has followed suit with a decline of over 6%, settling at a trading price of $1,663. Reflecting market sentiment, the Fear and Greed Index on Coinmarketcap stands at 37%, it serves as a gauge for market sentiment.
Over the past day, the global crypto market capitalization has encountered a sharp drop of over 6%, now resting at $1.05 trillion.
The dynamics of this shift have significantly impacted other cryptocurrencies, including XRP, Solana, Litecoin, Bitcoin Cash, and Chainlink.
These assets, influenced by the dominant force of BTC in the market, also suffered substantial losses in the span of 24 hours.
Various sources have put forth diverse narratives regarding this market selloff. A prevailing perspective, highlighted by a Wall Street Journal report, asserts that Elon Musk’s SpaceX marked down the value of its BTC holdings by $373 million and reportedly executed undisclosed sales.
Additionally, reports suggest that the crypto market downturn might have been initiated by derivative traders liquidating substantial sums of options and futures contracts.
Options offer the traders the leverage to sell and buy at specific time and price. Futures on the other hand, allows the holder to puchase only at predetermined rate at a specific time.
Prolonged depreciation of an asset often prompts derivative traders to offload their positions. This scenario could likely explain BTC’s downward trajectory over the past few weeks.
Another angle to consider is the limited influx of impactful news within the crypto sphere. News developments exert a notable influence on crypto trade volumes.
The initial enthusiasm sparked by the prominent investment firm BlackRock’s application for a Spot Bitcoin ETF, a product designed to mirror actual Bitcoin prices, seems to have waned. The US Security and Exchange Commision (SEC) do not seem to be in a hurry to approve this investment vehicle.
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