Bitcoin suffered a 6.6% drop to $59,203, while Ether, the second-largest cryptocurrency, faced an even steeper loss, falling by over 8% to $2,457.
“The crypto market is like a rollercoaster, suddenly plunging downward, triggering a wave of liquidations due to leverage. It appears that Ethereum is the culprit, initiating this downward spiral, reflecting the challenges this coin has faced over the past year compared to Bitcoin,” described Steven Lubka, Head of Private Client and Family Office at Swan Bitcoin.
According to data from CoinGlass, on the futures market, $93.52 million in long Ether positions and $85.93 million in long Bitcoin positions were liquidated on centralized exchanges. This forced traders to sell their assets at market prices to settle debts, creating a downward spiral.
However, Lubka added, “These leveraged liquidations often present a golden buying opportunity. I expect the market to quickly ‘buy the dip’ for Bitcoin. However, Ethereum may continue to struggle until investors find a reason to turn optimistic again.”
Despite this significant drop, Bitcoin has maintained an impressive 39% gain since the start of the year. Ether, though less impressive, still holds a 7% increase.
“This is the kind of volatility we typically see in a bull market. It’s like a game of musical chairs, where over-optimistic investors get washed out, then pessimistic investors, and so on. But when looking at the big picture, a 5% move in Bitcoin is just a blip in the grand scheme of things,” remarked Ryan Rasmussen, an analyst at Bitwise Asset Management.
Bitcoin has remained within a safe range of $55,000 to $70,000 since April 2024, indicating relative stability amidst the volatility.
An unexpected factor that likely accelerated this correction was news of a federal grand jury issuing a superseding indictment against former President Donald Trump in a criminal election interference case in Washington, which may have indirectly impacted market sentiment.
“Traders are sensitive. They don’t like instability and often rush to safety—in this case, cash—when they sense danger. That’s probably what happened today,” said Bartosz Lipiński, CEO of the Cube.Exchange trading platform.
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