The cryptocurrency market received an unexpected blow on April 12 when a spontaneous drop in the price of bitcoin and prominent altcoins resulted in massive liquidations. The origin of this widespread price decline remains largely unknown, among a plethora of plausible reasons, including a recent price correction in US stock markets.
Nearly $500 Million Liquidated in One Hour Amid Cryptocurrency Flash Crash
According bitcoin/” target=”_blank” rel=”nofollow”>CoinMarketCap data, bitcoin fell 4.49% in the last day, falling as low as $66,052. As expected, the btc drop rippled through the market, with prominent altcoins ethereum and Solana posting daily losses of 8.12% and 12.16%, respectively.
As noted above, these losses resulted in 277,843 traders losing their leverage positions as total cryptocurrency liquidations reached $877.21 million in the last 24 hours according to Coinglass data. Of these figures, long positions accounted for $782.98 million, and short traders only lost $94.24 million.
In particular, $467 million in leverage positions were closed in one hour as a result of a general drop in prices. The largest amount of liquidations, $369.85 million, was recorded on Binance, while the largest liquidation order, valued at $7.19 million, occurred in the eth-USD market on the OKX exchange.
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Source: Coinglass
Interestingly, the bitcoin price drop was correlated with a drop in the US stock market, as the S&P 500 index fell 1.6% to trade as low as $5,108. This market decline was preceded by recent CPI data, which showed that the inflation rate rose to 3.5% year-on-year in March.
Such reports only indicate that the US Federal Reserve (Fed) could not implement any rate cuts soon, as its goal is to force inflation to its annual target of 2%. This prediction is quite bearish for the broader crypto market as the Fed's rate cuts allow investors to comfortably pursue risky assets like btc with the potential for high returns.
bitcoin Sees Network Growth as Halving Approaches
On a more positive note, bitcoin has seen an increase in non-empty wallets on its network ahead of the April 19 Halving event. Santiment blockchain analysis platform x.com/santimentfeed/status/1778778828753736053″ target=”_blank” rel=”nofollow”>reported an increase of 370,000 btc wallets with active coins in the last six days. Interestingly, the analysis team is backing investors to maintain this cumulative trend throughout the bitcoin halving event.
At the time of writing, bitcoin was trading at $66,882, with a 44.80% increase in its daily trading volume, which is currently valued at $43.8 billion. However, the overall bitcoin price has not been impressive as of late, with a drop of 1.33% and 6.20% in the last seven and 30 days, respectively.
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x/JClWQI1L/" alt="bitcoin" width="1479" height="893"/>bitcoin trading at $66,499.00 on the daily chart | Source: BTCUSDT chart on Tradingview.com
Featured image from The Independent, chart from Tradingview
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