Crypto market bloodbath leads to $432M in liquidation

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The cryp­to mar­ket tur­moil entered the third week of Sep­tem­ber as most of the cryp­tocur­ren­cies start­ed the week on a bear­ish note. The total cryp­to mar­ket cap dipped below $1 tril­lion again, with sev­er­al cryp­tocur­ren­cies record­ing a dou­ble-dig­it down­fall over the past 24 hours.

The ongo­ing bear­ish tur­moil has led to near­ly half a bil­lion in liq­ui­da­tions for the lever­age cryp­to traders over the past 24 hours. Data from Coin­glass high­light that 130,087 traders were liq­ui­dat­ed with a total liq­ui­da­tions val­ue of $431.51 mil­lion. Bit­coin (BTC) lever­age traders lost $44.5 mil­lion, fol­lowed by Ether (ETH) traders with a total liq­ui­da­tion of $8.39 million.

Long traders made a sig­nif­i­cant chunk of loss­es on major­i­ty of the exchanges with the aver­age dif­fer­ence between the amount of long and short liq­ui­da­tions being 10X.

Liq­ui­da­tions on Dif­fer­ent Exchanges Source: Coinglass

The cur­rent mar­ket tur­moil is being attrib­uted to sev­er­al macro­eco­nom­ic fac­tors, includ­ing the recent­ly released con­sumer price index (CPI) data released on Sept. 13 that showed infla­tion is yet to cool off. BTC’s price fell near­ly $1,000 with­in min­utes of the CPI data release. Since then, the mar­ket showed some will to move up over the week­end but saw anoth­er blood­bath ear­li­er on Monday.

The high­er CPI data is expect­ed to be fol­lowed by a Fed rate hike in the upcom­ing meet­ing sched­uled for Sept. 21. Mar­ket pun­dits have pre­dict­ed that the rate hike could be the biggest in 40 years as a mea­sure to con­trol the soar­ing inflation.

Accord­ing to the CME Fed­Watch Tool, the mar­ket has now ful­ly priced in a min­i­mum 75-basis-point hike for the Fed funds rate and is not dis­count­ing the chances of 100 basis points. A 100-point increase would be the Fed’s first such action since the ear­ly 1980s.

Relat­ed: Here is why a 0.75% Fed rate hike could be bull­ish for Bit­coin and altcoins

The recent­ly con­clud­ed Ethereum Merge was also blamed by many as a buy the rumor, sell the news” event, where the price of Ether (ETH) rose as high as $2,000 in the run-up to the Merge, but has now declined to $1,300 post Merge.

With the stock and cryp­to mar­kets see­ing a sim­i­lar bear­ish trend, pop­u­lar trad­er Clark was quick to point toward the sim­i­lar­i­ties of cur­rent mar­ket con­di­tions to that of the 1970s. 

In his tweet, Clark not­ed that the mar­ket could turn bull­ish again towards the end of the year in the months of Novem­ber and Decem­ber. Thus, the cryp­to mar­ket could see anoth­er bull­ish ral­ly in tan­dem with the stock mar­ket towards the end of 2022.



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