A sudden downturn in the cryptocurrency market resulted in Bitcoin losing value at the beginning of Q2, leading to significant liquidations throughout the network.

For more information on the flash crash and its impact on the market, continue reading below.

Bitcoin Drops by 5%

Bitcoin, the top cryptocurrency, experienced a sharp decrease, reaching a low of $66,000, while Ethereum briefly dropped to $3,319. The sudden price decline caused substantial liquidations.

Within the last hour, the total liquidation across the Bitcoin network amounted to $157 million, with the majority coming from long orders totaling $144 million.

Overall, the global crypto market saw a sudden decline, with Ethereum falling by 6.71% and Solana by 9.32% in the past 24 hours, resulting in losses of $92.26 million and $17 million respectively.

Transition to Memecoins

An interesting trend has emerged where liquidity is moving from Bitcoin and other major altcoins to meme coins, creating what analysts describe as a 'peculiar bull market.' While Bitcoin, Ethereum, and Solana experienced significant outflows, the total capitalization of Memecoins surged to $70 billion.

This increase in capitalization is mainly attributed to pumps in newly launched tokens like 'dogwifhat' and 'Book of Meme,' as well as older meme coins such as Pepe and Bonk.

Binance Labs Allegations of Token Sale

There are suspicions that Binance Labs may have sold some of its investment tokens during the unexpected market crash. Reportedly, a significant transfer of 9.33 million GMT tokens, worth $3.14 million, moved from an address linked to Binance Labs to a Binance Deposit address.

Impact of Bitcoin Halving

The fourth Bitcoin halving event is just 18 days away from the recent flash crash. Bitcoin has shown seven consecutive monthly closures in the positive, but market sentiment remains cautious as BTC/USD levels drop to their lowest point since March 25. Analysts are closely monitoring support levels, with possible tests of $67,200 looming if Bitcoin falls below the 200-period moving average on the four-hour timeframe.