Crypto Carnage: Bitcoin and Ethereum Liquidations Soar

The cryptocurrency market is enduring a brutal downturn this week, with approximately $191 million in crypto derivatives contracts being liquidated in the last 24 hours. Bitcoin (BTC) has borne the brunt of these liquidations, accounting for about $103 million. Ethereum (ETH) follows closely behind with $33 million in liquidations. This sharp rise in liquidations comes after Bitcoin dipped below $60,000 for the first time since early May, leading to a 24-hour liquidation tally that skyrocketed to $330 million.

This spike in liquidations is a clear sign of increased market volatility and a prevailing bearish sentiment among investors. Bitcoin’s price fell by 2.2% over the past 24 hours, settling at $61,516.48, while Ethereum saw a 0.7% decrease, trading at $3,382.27 on Tuesday.

In the past week, BTC and ETH have declined by approximately 6.5% and 1.4%, respectively. However, there are glimmers of a rebound as both cryptocurrencies show slight recovery signs. Bitcoin’s price has risen by 0.2% since yesterday, and Ethereum has bounced back by 1.8%.

Julio Moreno, head of research at CryptoQuant, attributed the recent Bitcoin price movement to a lack of demand growth or momentum from traders, whales, and ETFs. Another analyst at CryptoQuant, Mignolet, suggested that accumulation whales might step in to halt the bearish trend, potentially leading to a “V-shaped rebound.”

The bulk of these liquidations affected long positions across various exchanges, reflecting a widespread market reaction to recent negative news and economic data. Over the last 24 hours, 64,829 traders were liquidated, with total liquidations reaching $294.14 million, according to CoinGlass. The largest liquidation order was a BTCUSDT contract valued at just over $15 million.

Bitcoin and Ethereum Leading the Liquidation Frenzy

Bitcoin’s substantial impact underscores the ongoing volatility in the market’s largest cryptocurrency. Its price has been pressured by macroeconomic factors, regulatory concerns, and shifting market sentiment. Last week, German authorities offloaded seized Bitcoin worth about $325 million within 48 hours, adding to the market pressures.

“Given the recent price slippage of BTC, the German government is offloading significant amounts of BTC, indicating their belief that BTC prices might remain soft for a while,” stated Robert Quartly-Janeiro, chief strategy officer at crypto exchange Bitrue.

As traders’ positions are forcibly closed, this cascade effect further drives BTC’s price down, reinforcing a bearish market outlook. While Ethereum also faced significant liquidations, the $33 million in ETH liquidations since yesterday highlight the challenges the second-largest cryptocurrency faces amid similar market pressures and changing investor sentiment.

The current landscape of the crypto market highlights the inherent volatility and rapid shifts in investor sentiment. With Bitcoin and Ethereum leading in liquidations, the overall market remains in a state of flux, with potential recovery hinging on various economic and regulatory factors.