Crypto : $145M In Bitcoin And Ethereum Liquidations - The Market Trembles !

Volatility has struck the cryptocurrency market once again, causing a sharp drop in major assets, including Bitcoin and Ethereum. This new wave of liquidations has brought about a series of consequences well-known to investors. At the same time, the market shows signs of increasing fragility, highlighting the inherent risks of long positions.

Bitcoin: An Expensive Fall

Bitcoin, often considered the « digital gold », saw its long positions liquidated to the tune of 90 million dollars, a record level since August 5th. This bloodbath for investors contributed to a sharp decline in Open Interest, which dropped by 2.2 billion dollars. 

Traders were speculating on higher prices, which created a fragile environment.

Open Interest rose from $13.5B to $17.9B (31%) since August 5th, and Funding Rates remained positive, indicating a premium on perpetual contracts.

This situation often leads to instability in… pic.twitter.com/G6c9fO6bbo

— CryptoQuant.com (@cryptoquant_com) August 28, 2024

This shows how much the market has lost its recent momentum. 

« Speculation on higher prices has created a fragile environment », as observed by @jjcmoreno. 

In reality, Bitcoin was not the only one to suffer, but its drop of more than 10% in just two days has revived fears of a new downward spiral.

Here are the key figures of this debacle:

• Bitcoin plunged by 10.8% in two days;
• Open Interest fell from 13.5 to 17.9 billion dollars;
• Long liquidations reached a peak of 90 million dollars.

A Volatility Destabilizing the Entire Crypto Market

Beyond Bitcoin, the entire crypto market is facing worrying instability. Ethereum, for example, was also severely hit, with long liquidations reaching 55 million dollars. 

This wave of liquidations is not a mere isolated incident, but a symptom of a market struggling to digest the sudden influx on trading platforms. The already fragile positions of traders started to give way, fueling a vicious cycle where volatility begets more volatility. 

Investors, burned by these brutal movements, are now on high alert, watching for any sign of calm in this tense climate.

This sharp drop in the crypto market results from massive liquidations and exacerbated volatility, reminding us of the caution necessary in the face of the chronic instability of cryptocurrencies.