The cryptocurrency market experienced a significant downturn, losing $150 billion within a day. Amid major trades and a recent breach, leading cryptocurrencies such as Bitcoin and Ethereum faced a sharp price drop.
Sharp Decrease in Cryptocurrency Prices
Bitcoin fell by 7% to $88,993, while Ethereum dropped by 10% to $2,426. XRP and Solana also faced declines, falling by 11% and 13% respectively. Analysts attribute this fall to rapid price swings, resulting in $340 million in liquidations within an hour.
Breach and Liquidity Implications
On February 21, a breach at Bybit resulted in a $1.4 billion loss. This event triggered mass withdrawals from platforms, reducing available funds for transactions. The situation is compared to thefts in traditional finance, such as the 2003 Central Bank of Iraq heist.
Macroeconomic Instability
Meanwhile, traditional markets show rising instability, with the Volatility Index increasing by 22% over five days. Market participants are starting to avoid assets perceived as unstable, including cryptocurrencies. The Crypto Fear and Greed Index fell to 29, indicating a preference for short-term exits among investors.
The current state of the crypto market highlights the fragility of assets dependent on steady participation and operational security. Without new capital inflows or easing external pressures, the downward trend could continue. This underscores the importance of trust and liquidity for market stability.
