The crypto market lost $300 billion in value within 24 hours without any major bearish news. Let's explore what happened.
Bitcoin and Ethereum Take a Hit
Bitcoin lost $5,000 in price within 30 minutes, twice during one morning. Ethereum suffered a 37% drop in two days, despite market news already being priced in.
Wall Street Bets Big Against ETH
Institutional investors once again focused on short positions in Ethereum: short positions grew by 40% last week and by 500% since November 2024.
Never in history have Wall Street hedge funds been so short of Ethereum.
Liquidity Crunch = Extreme Volatility
A drop in market liquidity leads to sharp price fluctuations. Institutional investors continue to influence the market, creating significant price swings.
When the market sees a drop in liquidity, price action drops sharply.
The cryptocurrency market remains highly volatile. Institutional players and a lack of liquidity contribute to sharp price swings.
