The crypto market experienced a sharp reversal in a single day Thursday/Friday morning, with Bitcoin falling from close to $28k to lows of $25,600 in minutes. The market’s reverberations resulted in almost $1 billion in liquidations, and the crypto market cap shrank by about 7%.
Merchants were rekt as a big $1 billion in liquidations occurred.
Despite the fact that the benchmark cryptocurrency has cut some of its losses to trade around $26,440 at 7am ET, the negative shift has left over 176,000 merchants rekt. According to Coinglass data, 176,700 merchants liquidated in the previous 24 hours, with total liquidations in that time period totaling $1.04 billion.
Longs accounted for $832 million of the liquidated holdings, while shorts accounted for around $206 million. Bitcoin saw over $499 million in liquidations, with longs accounting for $373 million and shorts accounting for $125 million.
According to Glassnode data, the largest single liquidation order on Binance was $55.92 million and involved ETH/BUSD. The price of ETH has dropped below $1,580, its lowest level since mid-June. This was posted on X by Wu Blockchain.
Why did Bitcoin’s value plummet so quickly?
Bitcoin teetered on the brink of collapse on Thursday, mirroring the broader market’s reaction to the release of Fed minutes on Wednesday. After breaching below $28k, owing partly to a lack of volume, the possibility of a flash crash increased.
This occurred following reports that Elon Musk’s SpaceX had sold its Bitcoin holdings. By the time the rumour was debunked, BTC/USD was trading at levels last seen when the market reacted more strongly to news of BlackRock’s spot Bitcoin ETF software.
The return to the crucial $28k level is more likely to be dependent on regulatory information involving the Grayscale ETF software, which is expected today around 11 a.m. ET. Nonetheless, according to ETF data, there is some optimism linked with the approval of several Ether futures ETF functions. These and other market conditions may be critical not only for Bitcoin and Ethereum, but also for the overall crypto industry.
Bitcoin below $25k would bring the $20k support level into focus, threatening a retest of the 52-week cycle lows. On the other hand, a comeback to $28k on a combination of upside triggers might inject current momentum and bolster bulls.
