Just a few days after a $400 million liquidation event rocked the crypto market, another wave of carnage has swept through leveraged positions. Bitcoin and Ethereum prices took a nosedive on June 11th, leaving many traders facing margin calls and weeping over evaporated profits.
Key Points:
Liquidation Frenzy: Over the past 24 hours, a staggering $190.97 million in leveraged positions were liquidated across the crypto market, according to CoinGlass data. This brutal correction sent 83,912 traders scrambling as their bets went belly up.
Bitcoin Bloodbath: Bitcoin bears the brunt of the liquidation carnage, with a total of $46.9 million liquidated. Long positions, which wagered on a price increase, suffered the most, accounting for $36.8 million of the losses. Short positions, betting on a price decrease, weren't spared either, totaling $14.07 million.
Ether Eviscerated: Ethereum wasn't immune to the pain, with $41 million in liquidations. Similar to Bitcoin, long positions were hit the hardest at $31.3 million, while shorts amounted to $9.68 million.
Fear in the Air: This recent market plunge is attributed to anxieties surrounding upcoming economic events. The looming May Consumer Price Index (CPI) report and the Federal Open Market Committee (FOMC) meeting on June 12th are spooking investors. A rise in CPI data could indicate growing inflation, often leading to decreased investor confidence and a shift away from riskier assets like crypto.
Correlations and Cash Constraints: The crypto market's growing correlation with traditional markets, particularly the US stock market, adds another layer of complexity. When inflation pinches consumers' wallets, they tend to have less disposable income for investments, impacting both stocks and crypto. While the FOMC is not expected to raise interest rates this time, any hawkish signals about future hikes could further dampen investor sentiment.
Looking Ahead:
This episode serves as a chilling reminder of the volatility inherent in leveraged trading, especially in the unpredictable world of cryptocurrency. As the market matures, novice and experienced investors would be wise to adopt a cautious approach and closely monitor economic data releases before diving headfirst into leveraged bets. With the potential for further market corrections looming, a strategic and risk-averse approach might be the key to surviving the current crypto climate.
Source: Cointelegraph
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