The cryptocurrency market capitalization has plunged by more than 8% in the past 24 hours, to around $2.09 trillion in Europe as of Friday morning. Over the past four weeks, the market has lost around $600 billion in value, mainly due to the decline of Bitcoin (BTC).
According to the latest market data, the price of Bitcoin has fallen almost 9% in the past 24 hours, and is currently around $54,000. This continued decline has led to the liquidation of nearly $700 million in crypto derivatives trading, with the majority of the losses being incurred by long traders.
On-chain data from PeckShield shows that one whale liquidated around 173,230 Ether (worth around $10.7 million).
Main reasons for the crypto crash
Following Bitcoin’s sudden drop, several other crypto whales were also liquidated. These forced sales further exacerbated the market decline and caused great concern for investors.
The recent crypto crash can be attributed to several negative events.
- Economic uncertainty and political changes: The US Federal Reserve’s signal of further economic uncertainty and political changes in the UK, where the Labour Party won a majority, contributed to market volatility.
- Whale selling: The German government, which holds around 40,000 Bitcoin, triggered a wave of whale selling. Bitcoin whales released more than 30,000 BTC last month, according to on-chain data.
- ETF Demand Falls: Demand for US-based spot Bitcoin ETFs has been waning in recent weeks.
- Mt. Gox Payout: After more than a decade, Mt. Gox has begun paying out more than 100,000 Bitcoins to customers, worth more than $7 billion.
A Negative The outlook with a Silver Lining?
The cryptocurrency market has been in a bearish trend for the past month, and this trend seems likely to continue. However, some analysts point out similarities between the current cycle and the 2017 bull market, which saw multiple corrections between 25 and 40 percent.
Despite the prevailing bearish sentiment, market analysis firm Santiment suggests that brave traders could take advantage of the current atmosphere of public anger and discontent. Although caution is advised, great opportunities could be ahead for those willing to navigate the turbulent market conditions.
