Bitcoin (BTC) and Ethereum (ETH) experienced price declines as the broader cryptocurrency market saw significant liquidations.
CoinGlass data indicates that over the last 24 hours before press time, the cryptocurrency market saw $463 million worth of liquidations. Bitcoin’s today’s fall to under $93,000 is primarily attributed to macroeconomic woes, with market participants fearing that prolonged inflation is likely.
This seems a continuation of a recent trend. Min Jung, an analyst of Presto Research, recently told The Block that macroeconomic concerns are now pushing both traditional and crypto markets down:
“Not just crypto, but both the NASDAQ and S&P 500 fell more than 1% yesterday, driven by concerns over inflation after ISM data revealed faster-than-expected growth in the U.S. economy. […] This heightened fears of persistent inflation, [led] to a surge in bond yields, with the 10-year Treasury reaching its highest level since April.”
The details
Such large liquidations are often described as a “leverage flush” by market observers and are viewed as a sane cyclical occurrence, making the market more stable. Large amounts of leveraged positions in a market result in forced sellers or forced buyers during liquidations, which might significantly amplify market movements and volatility.
At the time of writing, Bitcoin is trading at almost exactly $94,300 after losing just 0.35% of its value over the last 24 hours. The price of the world’s first cryptocurrency is also nearly 3% lower than where its price stood seven days ago.
Ethereum, on the other hand, currently changes hands at just over $3,300 after losing just 0.33% of its value over the last 24 hours. The price of the world’s first cryptocurrency is also nearly 4.8% lower than seven days ago.
The Crypto Fear & Greed Index, a multifactorial measure of crypto market sentiment, currently indicates a level described as “greed.” The index stands at 69, indicating that the crypto market is now overrun by greed. With such scores, the instrument warns of a possible imminent correction:
“When Investors are getting too greedy, that means the market is due for a correction.”
