The value of the main cryptocurrency has dropped significantly, causing traders to suffer losses of $1 billion in the last 24 hours.
The global market capitalization of the cryptocurrency market fell 6.03% to $1.07 trillion in 24 hours.
What Happened: Bitcoin and other altcoins plummeted on Thursday, breaking the stagnation of the past few weeks. Traders have begun selling digital assets in anticipation that interest rates will remain high for longer than originally thought.
CoinGlass data showed that around $823 million of long positions were liquidated during the recent market turmoil, resulting in significant losses for traders betting on rising prices. Bitcoin traders were the hardest hit, with settlements totaling $488 million, followed by ETH at $303 million.
Liquidation events occur when cryptocurrency prices fall, turning this month's gradual decline into a chaotic situation. This was exacerbated by fears of a weakening foreign currency, economic turmoil in China and bond yields rising to their highest levels in years. As a result, major cryptocurrencies such as BTC and ETH suffered heavy double-digit losses, hitting their lowest levels since early summer.
Chinese real estate giant Evergrande Group filed for bankruptcy protection in the US on Thursday. The company has taken steps to obtain Chapter 15 bankruptcy protection. This special chapter protects non-US companies from possible lawsuits by creditors or attempts to control their assets in the United States during a restructuring.
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Stocks continue to lose their third straight session on Thursday as investors await the latest earnings and loss reports and economic data. During the session, the S&P 500 fell 0.77%, while the Nasdaq Composite fell 1.17%.
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Analyst Note : “ It appears that some leveraged funds are increasing their cautious bets that Bitcoin will fall. The U.S. Commodities and Futures Contracts (CFTC) Trader Engagement Report shows that two-thirds were inactive as of Aug. 8, with most of the U.S. likely frustrated by the delay in bitcoin ETF approval,” said Edward Moya, senior market analyst at OANDA.
He added: “When you add up what is happening in the bond markets, the price of Bitcoin tends to fall. If risk aversion becomes the dominant theme on Wall Street, Bitcoin’s downside momentum could reach $27,200.”
Cryptocurrency analyst Michael Van De Poppe says that renewed open interest has taken us into uncharted territory, an area where the 4-hour RSI has not been seen since November 22 and March 23.
Alias Analyst Blutz Predicts a Possible Sharp Correction in Bitcoin. In line with the events of four years ago, when BTC pulled back strongly over 80% from its 2017 peak.
“The longer we stay here without a BTC bounce, the more I feel we may be forced into a 2019-like macro pullback. It is clear that momentum is waning here, and it is becoming increasingly difficult to stay bullish,” Blantz notes.
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