crypto market causes almost $500 million in liquidations within 24 hours

Bitcoin futures long liquidations have reached a fresh eight-month high, according to data from crypto analytics company Glassnode, after the BTC price dropped below $22,000 on Friday.

After a month-long bullish ascent, the crypto market saw a significant decline on Friday, resulting in major cryptocurrencies losing crucial support and dropping to new monthly lows.

Bitcoin (BTC), which was attempting to surpass the $25,000 barrier mark last week, dropped below $22,000 to a two-week low of $21,747. Ether (ETH), the second-largest cryptocurrency, climbed beyond $2,000 in the days leading up to the Merge but has fallen 6% in the previous 24 hours to a new weekly low of $1,726.

After weeks of bullish momentum, the flash collapse resulted in the liquidation of 157,098 traders and approximately $551 million in total liquidations. According to data from Coinglass, Bitcoin dealers lost almost $203 million, followed by Ether traders with a loss of $140 million.

The accompanying figure demonstrates that the number of liquidated long positions significantly exceeds the number of short positions, showing that market sentiment was very optimistic before to the flash collapse. The value of liquidated short holdings was just $41 million, compared to $398 million for long ones.

Long liquidations of BTC futures achieved a new eight-month high of $84,934,697.05 on OKX, surpassing the previous record of $48,630,183.66 set on May 5.

The rapid decline in the cryptocurrency market is linked to the anticipated September rate rise by the Federal Reserve. The consumer price index data for August came in lower than anticipated, causing a positive spike in both crypto and foreign currency markets.

The Fed’s decision to raise interest rates next month might trigger another recession. After an initial price increase, a similar 75-basis-point interest rate rise in June caused market volatility on the cryptocurrency exchanges.

Also Read: Former Ark Invest Analyst Forecasts Bitcoin Reaching $20,000 And Ethereum At $1,000 Minimum