The cryptocurrency market faced a significant downturn with nearly $500 million in liquidations within a single day, driven by economic concerns and heavy selling on major exchanges.
Causes of Liquidations in the Crypto Market
The primary cause of such a large number of liquidations was macroeconomic factors. As noted by analyst CoinGlass, "Over $500 million in long positions were forced to sell in a 24-hour period, with long liquidations for Bitcoin and Ether amounting to $124 million and $184 million, respectively."
Impact on Major Cryptocurrencies
The situation had a significant impact on BTC and ETH prices. As a result of the liquidations, price drops were observed, with the market cap decreasing by 3.4%, equivalent to around $3.96 trillion. A representative from the Economic Times stated: "Bitcoin slid toward $115K as $500 million in liquidations shook the crypto market...".
Long-Term Outlook and Institutional Investments
Despite the short-term price drop, Bitcoin and Ethereum ETFs reported positive net inflows totaling $547 million and $2.9 billion for the week respectively. Analyst Ainvest noted, "ETFs tracking Bitcoin and Ether logged net inflows, highlighting continued investor interest."
The downturn in the cryptocurrency market driven by liquidations highlights its volatility. However, the behavior of institutional investors and positive ETF figures suggest that long-term prospects remain optimistic.
