Crypto Market Plunges: $900 Million Liquidated as Bitcoin Tumbles
The cryptocurrency market has been rocked by a dramatic downturn over the past 24 hours, leading to a staggering $900 million in liquidations. Bitcoin, the leading digital asset, experienced a steep fall to a seven-week low, leaving thousands of traders caught off guard and forcing them out of their positions.
Bitcoin's Steep Fall and Market Fallout
Approximately 200,000 traders were liquidated, with the majority of losses stemming from leveraged long positions that could not withstand the sudden slide. A significant event contributing to the market's intensified selling pressure was the offloading of 24,000 BTC by a large holder. This cascade sent Bitcoin briefly below the $109,000 mark on Coinbase. The ripple effect saw the total cryptocurrency market capitalization shrink from just under $4 trillion to approximately $3.83 trillion, indicating a nearly $200 billion outflow from the sector.
Macroeconomic Factors and Ethereum's Resilience
The market's recent plunge can be attributed, in part, to macroeconomic signals. Federal Reserve Chair Jerome Powell's recent hints at potential interest rate cuts at Jackson Hole influenced how some investors perceived and priced risk. Since its all-time high of over $124,000 on August 14, Bitcoin has corrected by more than 10%, with roughly 7% of that drop occurring after Powell's speech. In contrast, Ethereum (ETH) has shown relative resilience, trading steadily near $4,340 and maintaining its ground above last week’s lows, bolstered by continued institutional interest.
Altcoins Bear the Brunt, Historical Context
While Bitcoin and Ethereum faced pressure, many smaller tokens, or altcoins, suffered even more severe declines. Assets like Solana, Dogecoin, Cardano, and Chainlink were among the hardest hit, leading to greater drawdowns for traders heavily invested in these alternative cryptocurrencies. The weekend's lower liquidity further exacerbated these price gyrations, making the market movements more extreme. Historically, September has proven to be a challenging month for crypto markets, marked by significant pullbacks in previous bull runs, notably in 2017 and 2021.
