The crypto market has faced a sudden price drop, as reported by major analytical sources. Key factors contributing to this include liquidations and options expirations.
Liquidations in the Crypto Market
Over the past 24 hours, liquidation volumes in the crypto market exceeded $750 million, with $380 million liquidated in just 4 hours. According to Coinglass data, more than 196,000 traders were liquidated, including the largest single liquidation order of $12.74 million in the BTCUSDT pair on the OKX exchange. Of the total liquidation volume, $660 million came from long positions and $90 million from short ones. Major cryptocurrencies including Bitcoin, Ethereum, Solana, and Dogecoin faced significant liquidation.
Bitcoin and Ethereum Options Expiry
A primary reason behind the market crash is the $11.6 billion expiry of Bitcoin and Ethereum options happening today on Deribit. Traders were expecting a pullback in prices amid market uncertainty. According to Deribit, 93,000 Bitcoin options with a notional value of nearly $10 billion are set to expire on Friday, while 624,000 Ethereum options valued at over $1.62 billion are also expiring today. Market positions indicate a possibility of further price declines.
US Inflation Data
Traders are also assessing the US PCE inflation data due today. The annual PCE inflation is projected at 2.2%, down from the previous 2.3%. Month-over-month inflation is also expected to rise by 0.1%. Moreover, the annual core PCE inflation may fall to 2.2%, with a monthly increase of 0.1%.
The recent crypto market crash has been caused by multiple factors, including position liquidations and options expirations. The future of the market remains uncertain, depending on how investors react to the current economic data.
