The crypto market observed over $1 billion in long liquidations following sharp declines in Bitcoin and Ethereum prices, triggered by adverse U.S. inflation data.
Causes of Liquidations
Sharp declines in Bitcoin (BTC) and Ethereum (ETH) prices occurred after the release of negative U.S. inflation data, raising concerns among investors. According to Coinglass, a significant volume of liquidations concentrated on platforms like Bybit, Binance, and OKX.
Market Impact and Liquidated Assets
Overall market losses reached $133 billion, bringing the market cap down to $3.98 trillion. Ethereum was the most liquidated asset, totaling $351.8 million in liquidations, primarily from long positions. Analysts have highlighted notable dip-buying activity among large wallets during this liquidation event.
Future Implications and Market Reactions
These events resemble previous liquidation waves tied to macroeconomic data, leading to calls for caution and risk management. Notably, Tether (USDT) remained stable amid the market downturn, signifying a potential resilience in certain assets.
The current situation suggests a potential shift in trading approaches and stricter risk management measures among market participants, which may lead to a more robust trading infrastructure in the future.
