In a sudden but massive selloff on Wednesday, the global crypto market lost 3% to $1.23 trillion in a matter of a few hours. It was not just Bitcoin or Ethereum that nosedived but all the major digital currencies experienced a bad day in the office.
Liquidation Causes Sudden Meltdown
According to crypto traders, a massive liquidation was the driving force behind the sudden meltdown in the prices of Bitcoin (BTC) and Ethereum (ETH).
Soon, traders and investors went back into their shells, adopting a cautious strategy amid rising inflation concerns.
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It sparked a broader and even bigger selloff across the crypto-verse. The market saw more than $160 million worth of crypto assets liquidating in only an hour. Over the past 24 hours, the crypto market has lost more than $250 million worth of digital assets.
Bitcoin, and Ethereum Fall 5%, and 6%, Respectively
Bitcoin and Ethereum experienced significant declines in their prices, with Bitcoin falling 5% to $29,000 and Ethereum dropping over 6% to $1,988.
Other altcoins couldn’t keep themselves from the aftershocks of the colossal jolt. Some of the leading altcoins, including Binance (BNB), Ripple (XRP), Cardano (ADA), Dogecoin (DOGE), Polygon (MATIC), and Solana (SOL) also saw losses of nearly 5%.
The global crypto market cap fell by 3% to $1.23 trillion in the last 24 hours. This decline was triggered by massive long liquidation of over $175 million, with approximately 75,000 traders being liquidated in the past day.
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Factors Leading to Massive Crypto Selloff
The drop in crypto prices was influenced by a number of factors. The global stock market decline due to concerns about inflation and potential interest rate hikes by central banks, such as the Bank of England and the European Central Bank, contributed massively to the downfall.
The U.S. Dollar Index (DXY) also rose to 102, which further impacted the decline in Bitcoin and Ethereum prices.
Analysts Could See It Coming
Analysts have noted that this market correction was significant, with Bitcoin failing to hold at key support levels and experiencing a cascade of liquidations.
Some traders have expressed caution as officials from the U.S. Federal Reserve have suggested the possibility of higher interest rates in the future.
This sharp decline wiped out approximately 200 hours of Bitcoin price action in just 13 minutes. It reflected the volatility and unpredictability of the cryptocurrency market.
The Final Thoughts
The latest decline in Bitcoin, Ethereum, and other cryptocurrencies can be attributed to various factors. They include global economic events, interest rate expectations, and liquidation of long positions.
It also highlights the fact that the cryptocurrency market remains highly volatile. This is why traders should exercise caution when navigating these price fluctuations.
[…] Bitcoin and Ethereum Nosedive Amid a Massive Global Crypto Market Selloff […]
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