Crypto Market Sheds $170 billion as BTC, ETH Wobble -Here’s Why

FXEmpire.com -

Cryptocurrencies tumbled Friday as bearish headwinds flared-up geopolitical risks spread over to digital assets and unflattering earnings reports from US Banks.

Bitcoin and Ethereum led the Freefall

In fast downward afternoon action during U.S. trading hours, Bitcoin (BTC) plunged below $66,000 after having challenged the $71,000 level just hours earlier. At press time, bitcoin had bounced back to $67,300, down more than 5% over the past 24 hours.

Meanwhile, Ethereum (ETH), the second-largest cryptocurrency by market cap, fell as much as 12% to $3,100 before a modest bounce cut the decline to 8%.

Total Crypto Market Cap April 2024 | Source: Coingecko

Altcoins suffered even heavier losses during the market reversal. With the Cardano (ADA), Avalanche (AVAX), Bitcoin Cash (BCH), Filecoin (FIL) and Aptos (APT) all plummeting by double-digits between 15-20%

Taking a look at the broader digital asset market, the global crypto market capitalization stood at $2.74 trillion at the close of Thursday, April 11. But the rapid market dip saw over $170 billion was wiped out, bring it to  $2.57 trillion at the time of writing on April 13.

Crypto Market Liquidations Hit 30-day Peak of $850M, Accelerating the Losses

The drawdown triggered the largest leverage washout in a month, liquidating some $850 million of leveraged derivatives trading positions across all digital assets, CoinGlass data shows. Some $770 million of those positions were longs betting on rising prices, caught off-guard by the sudden decline.

Total crypto liquidations October 2023 – April 2024 | Source: CoinGlass

The dip occurred as stock markets sank during the U.S trading session amid rising fears of broadening conflict in the Middle East, as U.S. authorities warned that Iran could prepare to launch a significant attack on Israel.

Treasury bonds and the U.S. dollar index (DXY) surged as traders flocked to hedges, while key U.S. equity indices the S&P500 and Nasdaq 100 slipped 1.7% an hour ahead of the close of the trading session. Gold, long considered as a haven asset, surged past $2,400 to a new all-time high before paring its gains, while oil ticked 1% higher.

This article was originally posted on FX Empire

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