Bitcoin Plunges to Lowest Since August: What Triggered the Sell-Off?Bitcoin suffered a sharp decline on Tuesday evening, falling below $59,000 and reaching its lowest price since August 19th. Ethereum also tumbled, with Ether prices dropping nearly 10%
Bitcoin Plunges to Lowest Since August: What Triggered the Sell-Off?
Bitcoin suffered a sharp decline on Tuesday evening, falling below $59,000 and reaching its lowest price since August 19th. Ethereum also tumbled, with Ether prices dropping nearly 10%. This sudden plunge sparked widespread concern among market participants, with many speculating about the reasons behind the sell-off.
Earlier in the day, Bitcoin had climbed above $62,700. However, as the US trading day came to a close, the cryptocurrency market swiftly turned south. Bitcoin has fallen 6.5% in the past 24 hours, at one point reaching as low as $58,240. Ethereum experienced a similar fate, falling below $2,500 after trading above $2,700 earlier.
The sell-off not only impacted Bitcoin and Ethereum but also other major cryptocurrencies. BNB (BNB) dipped nearly 4% to $528, Solana (SOL) plummeted 7% to $146, and XRP fell 4% to $0.56. Dogecoin (DOGE) and TRON (TRX) also declined, by 6.5% and 2.25% respectively, trading at $0.098 and $0.158.
This sharp decline led to significant liquidations in the cryptocurrency derivatives market. According to CoinGlass, total liquidations of leveraged cryptocurrency derivatives positions reached $313 million in the past 24 hours, representing the largest washout since the market crash on August 5th. ETH traders suffered over $100 million in liquidation losses, while BTC traders endured $95 million in losses.
While the exact trigger for the sell-off remains unclear, some analysts have pointed to potential contributing factors:
1. Bitcoin Miner Selling Pressure: Bitcoin miners, who have been selling off Bitcoin through exchanges in Q2 2024, saw their net flow decrease. Although selling pressure has eased in the past two weeks, the accumulation trend in miner reserves has not completely reversed.
2. Stablecoin Supply Ratio: The Stablecoin Supply Ratio (SSR) reflects the liquidity of stablecoins available in the market for buying Bitcoin. Recently, the SSR has fallen to levels last seen in early February 2024, suggesting ample liquidity in the market that could potentially trigger a rebound.
3. Global Liquidity: Global liquidity, as measured by global M2 money supply, has begun to increase. Similar to the stablecoin supply ratio, this indicates more liquidity in the market available for purchasing assets.
Julio Moreno, head of research at CryptoQuant, noted that the total market capitalization of stablecoins has reached a record high of $165 billion, implying higher liquidity in the cryptocurrency market.
However, it's worth noting that these are just potential factors, and it's not yet possible to definitively say which, if any, was the direct cause of the sell-off. Market sentiment, regulatory policies, macro-economic environment, and other factors can all impact the cryptocurrency market.
The recent sell-off has also sparked concerns about the future trajectory of the cryptocurrency market. Some analysts believe the decline could merely be a short-term correction, with the market ultimately resuming its upward trend. Others, however, believe the cryptocurrency market might be entering a new bear market cycle.
Regardless, the recent decline serves as a reminder that the cryptocurrency market remains volatile, and investments should be made with caution. Investors should carefully consider their risk tolerance and develop sound investment strategies.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
