Crypto Market Crash: Liquidations Cross $800 Million As Japan’s Nikkei Drops 7%

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As a seasoned researcher who has weathered numerous market storms, I must admit that the current state of the crypto market is reminiscent of a turbulent sea. The relentless sell-off, with more than $800 million liquidated in just 24 hours, feels like a repeat of history.

At present, Satoshi Street is awash with excessive amounts of red (indicating a downturn) due to a massive 12.87% plunge in the broader cryptocurrency market. Over the past few hours, this collapse has resulted in a staggering $300 billion being wiped off the crypto market’s value. The selling pressure on digital assets has escalated significantly during Asian trading hours, coinciding with an additional 7% drop in Japan’s Nikkei index at the beginning of Monday, August 5. This latest decline in the Nikkei adds to its overall loss, which now exceeds 20% from the high point in July.

Crypto Market Liquidations Extend to $800M

According to Coinglass’s latest data, approximately $800 million worth of cryptocurrency positions were closed over the past day, with a significant portion, around $700 million, being long positions. In contrast, only about $106 million was from short positions, and these liquidations mainly occurred within the last 4 hours.

The cost of Bitcoin has plummeted by over 10%, falling below $54,500. Conversely, the adjustment in the altcoin market is more pronounced, with Ethereum‘s price tumbling by 20% and top altcoins correcting anywhere from 15-20%.

Due to a rise in cautious investing worldwide, Bitcoin has experienced one of its steepest declines since the FTX crash in 2022. Last Friday, August 2, Bitcoin exchange-traded funds (ETFs) saw their heaviest withdrawals in over three months. As the Bitcoin price currently sits below its 200-day moving average, it appears that the bearish sentiment has taken control for now.

US Recession Coming Soon?

Anticipation of a U.S. economic recession has risen substantially, as the likelihood of a rough landing has become more prominent. In light of this evolving financial situation, renowned economist Peter Schiff posits:

“For years, central banks have been playing with danger by maintaining abnormally low interest rates. However, this strategy has inflated a massive global debt bubble. As inflation starts to surge, the increase in interest rates bursts that bubble. Now it’s clear that unpaid debts are due. The game of artificially low interest rates has come to an end.”

In light of the recent downturn in the technology sector and the unstable global economic climate, U.S. stock index futures plunged significantly during Monday’s correction. Moreover, escalating geopolitical conflicts between Iran and Israel are exacerbating an already fragile market situation. As a result, it’s expected that the cryptocurrency market will endure the impact of cautious investments in the near future.

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2024-08-05 06:31