Panic in the crypto market: Over 272 million dollars liquidated!

The recent stock market volatility has caused a dramatic increase in liquidations in the crypto market. This event comes in an uncertain economic context, where investors are reassessing their portfolios in light of a possible recession.

Massive liquidations in the crypto market

The crypto market experienced a liquidation of over 272 million dollars in the last 24 hours. Bitcoin (BTC) was the most affected crypto asset by these liquidations, with nearly 78 million dollars liquidated, including about 44 million from long positions. This increase in cryptocurrency liquidations is linked to the stock market volatility. Indeed, the price of certain stocks has recently seen a significant drop. The S&P 500 had its worst session in nearly two years.

The Nasdaq Composite Index fell by 2.9%, while the Dow Jones lost up to 989 points. These events have prompted investors to reduce their exposure to risky assets, leading to increased selling pressure on cryptocurrencies. The situation was exacerbated by a disappointing jobs report in the United States for July, which raised concerns about an imminent recession.

The outlook for Bitcoin and influential external factors

Analyst Valentin Fournier of BRN suggested that Bitcoin could soon retest the support level of 62,500 dollars. According to Fournier, the market appears to be in an accumulation phase, with a possible breakout above 70,000 dollars in the medium term, provided that liquidity accumulates. However, he also highlighted growing uncertainty among investors, partly due to the performance of Bitcoin exchange-traded funds (ETFs), which show limited net positive inflows.

Furthermore, current political forecasts in the United States indicate that Kamala Harris could surpass Donald Trump in the polls. This anticipation is causing concern among cryptocurrency investors. According to Ruslan Lienkha of YouHodler, Harris’s rise could lead to stricter regulations on crypto assets, which could harm the price of Bitcoin.

Moreover, Bitcoin options show higher implied volatility for puts than for calls, suggesting that traders are preparing for a potential decline. Deribit’s weekly report indicates that the risk of a downside is increasingly anticipated by the market.

In summary, the recent massive liquidations highlight the fragility of the crypto market in the face of economic and political turmoil. As Bitcoin and other cryptocurrencies navigate an uncertain climate, investors need to be cautious. The evolution of government policies, particularly in the United States, will play a crucial role in determining future market trends.