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Crypto Crash: $825 Million Liquidations in 24 Hours!
Crypto Market Liquidations Reach $825 Million; Bitcoin and Altcoins Fall Drastically After Fed Rate Cut.
Crypto Crash: $825 Million Liquidations in 24 Hours!
In the last 24 hours, the crypto market has experienced a dramatic decline, resulting in $825.4 million in liquidations. Long positions accounted for over 79% of liquidations, which placed a heavy burden on investor confidence. Bitcoin, the digital currency with the largest market capitalization, was the hardest hit, recording $310.3 million in liquidations reported.
The overall situation in the crypto market is tense, with market capitalization falling by 1.6% to $3.8 trillion. Several factors are primarily responsible for this decline, including uncertainties surrounding the Federal Reserve's interest rate policy, excessive trading leverage, and declining investor interest.
Impact of interest rate cut and market conditions
The Fed's 0.25% rate cut not only dampened market action but also made non-interest-bearing assets like cryptocurrencies less attractive. This, coupled with an already existing pressure situation in the market, led to a cascading effect in liquidations. Long positions contributed $656.7 million to liquidations, while short positions contributed significantly less at $168.9 million.
What is particularly striking is that Bitcoin long positions had the most liquidations compared to other assets at $310.3 million. Ethereum follows with a 2.5% decline to $3,899 and Solana fell below the $200 mark, currently trading at $190.
Decline in altcoins and trading volumes
Other major altcoins such as XRP, which fell by around 3.5% to $2.56, are also affected by the losses. Smaller altcoins such as Pi Network and Aster saw declines of 2.1% and 5%, respectively, while Dogecoin fell 2.1% to around $0.189. The 24-hour trading volume stands at $192 billion, further illustrating the decline in trading interest in this segment.
The dynamic leveraged trading culture has proven to be another source of uncertainty, fueled by thin liquidity in the market. Despite the launch of new crypto ETFs, including the Bitwise Solana Staking ETF and Grayscale's Solana Staking ETF, momentum has slowed, compounding the current market crash.