More than 180,000 traders lost nearly $520 million as bitcoin traded dipped into the $25,000 level zone, a value point, not seen since December 2020 as the market selloff seen throughout the year grows. Many have related the decrease in the market to what was experienced in the 2008 market crash while others have drawn a parallel between this selloff to the Game of Thrones’ famous episode, “The Red Wedding”.
Bitcoin has plunged below a critical support level, the $25,000 support region and with it, liquidation, margin calls and loss of funds have become the topic of the day. The total cryptocurrency market capitalization has plunged nearly 8% as it now stands below the $1 trillion as of the time of this writing, implying that the market has forfeited its trillion-dollar status.
Similarly, with bitcoin, every other altcoin hitting drops of 20% and more in the last seven days as the selloff deepens. The main attention has been the CEL token, the born token of Celsius, which has now fallen over 50% of its price in just one day as the platform notified it was stopping withdrawals temporarily.
Liquidation implies when an exchange forcefully shuts down a trader’s leveraged position because of a partial or total loss of the trader’s preceding margin. It occurs when a trader is incapable to fulfill the margin requirements for a leveraged position (unavailability of enough money to keep the trade open). Liquidation can be experienced in both margin and futures trading.
The blood bath experienced in the market since the year started as crypto whales embarked on selling their possession in what is referred to as whale redistribution. Besides the Russian – Ukraine war, the selloffs then got heightened when the U.S. Fed hiked its interest rate to 1%, the biggest increase since 2000, as it handed down its policy verdict in May.
We are now noticing the influences of these events and the policy ruling made by the federal reserve. The U.S. Fed’s increase in the interest rate gave rise to a strong dollar index (a measure of the stability of the U.S. dollar).
During the time of composing this article, the dollar index is at a 20-year high, presently above 104 basis points.
When Bitcoin dip a little, the altcoins catch a cold and this was precisely what happened yesterday. We saw a huge sell-off in the altcoin market, with many tokens falling 20% and more in the last seven days.
Okex exchange experienced the most liquidation, denoting $186.74 million or 36.05% of the whole liquidations. Finance Is the second, representing $124.90 million which is approximately 24.11%.
In overview, Bitcoin (BTC) plunged to under $25,000 amid drawbacks in the macroeconomic environment and systemic obstacles from within the crypto market, study shows. The asset has slid for almost twelve consecutive weeks, tumbling from practically $49,000 in March 2022 to under $25,000. It revealed some clues of bottoming out in mid-May but troubling U.S. inflation data published last week did minor to cushion the falling notion