On Sunday evening, the entire cryptocurrency market experienced a sharp decline, led by a massive drop in the price of the largest cryptocurrency, Bitcoin. After trading steadily around $115,000 for most of the day, Bitcoin suddenly plunged to its lowest price level since July 10. This drop was unexpected, as the market had been relatively calm and stable throughout the weekend.
The sudden decline in Bitcoin’s price can be attributed to a number of factors, including a somewhat optimistic speech from Federal Reserve Chair Jerome Powell on Friday, which caused the cryptocurrency to skyrocket from under $112,000 to over $117,000 within an hour. However, this relief rally was short-lived, and Bitcoin quickly retraced to around $115,000, where it spent most of the weekend.
Less than an hour ago, the bears reemerged and pushed Bitcoin to a six-week low of $110,600 on most exchanges. While the cryptocurrency has since recovered to around $113,000, it is still trading below its previous levels. This sudden drop also affected other cryptocurrencies, with Ethereum (ETH) experiencing a similar volatile price movement. ETH, the second-largest cryptocurrency, had just reached a new all-time high of almost $5,000 before plummeting to nearly $4,700 and then recovering to around $4,800.
The market volatility has also caused significant losses for over-leveraged traders, with data from CoinGlass showing that over $300 million in liquidations occurred in just one hour. Long positions accounted for about 90% of these liquidations. On a daily scale, the number of liquidated positions is almost double, with over 130,000 traders being affected. The largest liquidated position, worth over $12 million, took place on OKX.
Overall, the sudden decline in the cryptocurrency market has caused significant losses for traders and has been attributed to a combination of factors, including Powell’s speech and market volatility.
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