Home Bitcoin News Bitcoin Plummets to One-Month Low Amid Altcoin Sell-Off: $455 Million Crypto Liquidation Explained

Bitcoin Plummets to One-Month Low Amid Altcoin Sell-Off: $455 Million Crypto Liquidation Explained

cryptocurrency market volatility

Bitcoin (BTC) has tumbled to its lowest point in a month, echoing a broader downturn across the cryptocurrency market fueled by a substantial sell-off of altcoins and outflows from spot exchange-traded funds (ETFs).

Bitcoin’s Price Dip and Market Reaction
During early Asian trading hours, Bitcoin peaked at $67,000 before plummeting to approximately $64,500. This decline marks a notable setback following three consecutive days of outflows from Bitcoin’s spot ETFs. Ethereum (ETH), Solana (SOL), and Toncoin (TON) also faced steep losses, each dropping over 3% in value.

Markus Thielen, founder of 10x Research, attributed the recent altcoin sell-off to significant token unlocks last week. Notably, digital assets like Aptos, IMX, Starknet, SEI, and Arbitrum saw unlocks totaling $483 million. The resulting pressure on venture capital investors to liquidate their holdings contributed to the downward pressure on Bitcoin and other major cryptocurrencies.

Thielen commented on the situation, stating, “As altcoin volumes in Korea crashed, so did the funding rates, and this caused Bitcoin ETF flows to slow down. It has come as a surprise that Bitcoin is failing to rally despite weak inflation data, but the Ethereum and altcoin crash might have been predictable.”

Massive Crypto Liquidation: $455 Million in a Day
Coinglass data reveals that recent price movements triggered a staggering $455 million in liquidations across all crypto assets, impacting over 172,000 traders within a single day. Long traders bore the brunt of the losses, with $393 million liquidated, while short traders saw $62 million in liquidations.

Ethereum (ETH) traders faced significant losses, accounting for $92 million of the total liquidations, representing 20% of the overall losses. Of this, $75 million was from traders betting on price increases, with the remaining $16 million from short-position holders.

Bitcoin also saw substantial liquidations, with $47.43 million from long positions and $22.71 million from short positions. Other major cryptocurrencies like Solana (SOL), XRP, and Dogecoin (DOGE) also experienced notable liquidations totaling $18 million, $4 million, and $60 million, respectively.

Impact of Binance and Major Liquidations
The Binance platform emerged as a significant player in the liquidation scenario, accounting for over 37% of the total market losses amounting to $170 million in a single day. The largest single liquidation recorded was a $6.64 million long position in Ethereum (ETH), underscoring the volatility and risk associated with cryptocurrency trading.

As the market navigates these tumultuous conditions, investors and traders are closely monitoring further developments. The interplay of ETF outflows, altcoin sell-offs, and overall market sentiment will likely continue shaping the trajectory of Bitcoin and major cryptocurrencies in the near term.

Looking ahead, market analysts and cryptocurrency experts are divided on the future trajectory of Bitcoin and altcoins. Some foresee a potential rebound as technical indicators suggest oversold conditions and historical patterns hint at possible price rallies, especially if Bitcoin manages to hold crucial support levels. However, lingering uncertainties around regulatory developments, macroeconomic factors, and global market sentiment continue to pose risks.

Investors and traders are advised to closely monitor market developments, including ETF flows, institutional investor behavior, and regulatory announcements. These factors will likely influence short-term price movements and the overall stability of the cryptocurrency market. As the market adapts to these challenges, prudent risk management strategies and staying informed about market dynamics remain paramount for navigating the volatility effectively.

In conclusion, while the crypto market faces challenges from regulatory uncertainties and investor sentiment shifts, the recent liquidation event highlights the inherent volatility and risk in cryptocurrency investments. Traders are advised to exercise caution and stay informed amidst evolving market dynamics.

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Evie is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs.

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