The post Why Crypto Is Down Today? $588M Crypto Liquidations Trigger Market Panic appeared first on Coinpedia Fintech News
The US stock market has taken a massive hit, losing over $1.5 trillion in a single day, and the crypto market felt the heat. This bloodbath has been triggered by a series of events, including the Federal Reserve’s rate cuts and global tensions, like Israel’s airstrikes on Iran-backed groups in Yemen. Let’s analyze what caused the bloodbath in Satoshi Street today.
Crypto Bloodbath: A Brutal 24 Hours
In the past 24 hours, the crypto market saw a huge sell-off, wiping out $588 million in positions. XRP was hit the hardest, with $69 million in liquidations after its price peaked at $2.82, the highest it’s been since 2017, before falling to $2.56. Bitcoin lost $60 million in liquidations after its price dropped below $96,000. Ethereum also took a hit, losing nearly $58 million.
What’s Behind the Drop?
A recent report from Santiment suggests that traders are feeling uneasy after the Federal Reserve’s interest rate cuts. While the cuts themselves weren’t the main concern, the projection that there will be fewer rate cuts in 2025 than expected has spooked both crypto and stock traders. This uncertainty, mixed with a shift from “Extreme Greed” to “Fear” in the market, has contributed to the sell-off.
Altcoins have been especially hard-hit, with assets like Avalanche, Chainlink, Litecoin, and Pepe all down around 16% in the past 24 hours. XRP has dropped 6.74%, now trading at $2.35, while Solana has seen a 9.79% dip over the past week, now priced at $208.49.
A Few Winners Amid the Chaos
Not all cryptocurrencies are suffering. Ethena (ENA) has risen 11.66%, trading at $1.18, thanks to new utility features. Movement (MOVE) has also posted a strong gain of 11.48%, now priced at $0.7171, driven by strong community engagement.
More Bloodbath in January?
Looking ahead, Arthur Hayes, the former CEO of BitMEX, has given a stark warning that the crypto market may see another major sell-off around Donald Trump’s inauguration on January 20, 2025. Hayes believes the market may not see a quick turnaround after Trump takes charge as many regulatory policies may get delayed due to political clashes. This can cause market sell-off if regulatory policies are delayed further.
On the flip side, it is seen as a buying opportunity despite the sell-offs analyst believe 2025 will be the year of Bitcoin and there might be some major drops before it hits another ATH. Also, there are rumors of a new ETF hitting next year which can help the market recover from this loss.