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Bitcoin’s Sudden Drop Triggers Massive Liquidation of $420 Million Long Positions
Bitcoin’s Sudden Drop Triggers Massive Liquidation of $420 Million Long Positions
In a recent development, Bitcoin, the world’s leading cryptocurrency, witnessed a substantial decline, leading to the liquidation of over $420 million in long positions in a span of 24 hours, as reported by CryptoNews on Tuesday.
Data from Coinglass reveals that 190,144 traders were liquidated, with total liquidations reaching $480.93 million. Of these, $420 million were long positions. Major cryptocurrency exchanges such as Binance, OKX, and HTX saw the liquidation of approximately $372 million in long positions.
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Bitcoin’s value sank to a low of $64,600 during early Asian trading hours on Tuesday, but has since seen a slight recovery, trading above $65,700 at the time of writing. This sudden drop in Bitcoin’s value has also resulted in a significant drop in altcoins, with Ethereum down nearly 4% in the same 24-hour period.
Other popular altcoins like Solana (SOL), Toncoin (TON)AND Cardano (ADA) also saw significant declines, down 8%, 6%, and 8%, respectively. The best meme coinsincluding Dogecoin (DOGE), Shiba Inu, PEPE, Dogwifhat, and Floki, saw even steeper declines, with some falling well in excess of 10%.
The sudden drop in the value of Bitcoin and the subsequent liquidation of long positions highlights the volatile nature of the cryptocurrency market. This volatility can lead to significant losses for traders, especially those holding long positions.
Furthermore, the decline in the value of Bitcoin also had a domino effect on altcoins, causing them to collapse as well. This indicates the strong correlation between Bitcoin and other cryptocurrencies, suggesting that a decline in the value of Bitcoin may have a widespread impact on the entire cryptocurrency market.
Meanwhile, the Federal Reserve’s plan to cut rates only once in 2024, down from its previous forecast of three, as it continues to monitor US inflation rates, could potentially impact the cryptocurrency market. Lower interest rates often lead to higher inflation, which could push more investors into cryptocurrencies as a hedge against inflation.
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