Bitcoins value took a nosedive, to $65,000 following a drop on April 12 causing financial setbacks for traders especially those with leveraged positions in the digital currency market. This downward spiral led to liquidations exceeding $400 million within an hour impacting not Bitcoin but also other cryptocurrencies.
On the day Bitcoin witnessed a 5% decline plunging from $68,341 to a low of $65,110 in less than an hour during late trading hours in New York. Ether, the cryptocurrency based on market capitalization also saw a significant drop of 8% sliding from $3,553 to $3,226.
According to Coinglass market analysis Bitcoins abrupt devaluation resulted in over $417 million worth of positions being liquidated within the period. Noteworthy figures include $77.93 million from long positions and more than $63.35 million from Ether long positions, among the total liquidation amount.
The highest number of both long position liquidations occurred on Binance cryptocurrency exchange, where traders incurred losses totaling $171 million. Another prominent exchange platform, OKX reported trader losses amounting to $158 million.
New information, from Coinglass revealed that in the 24 hours a staggering $860 million was liquidated across 270,993 traders.
The drop in cryptocurrency prices happened at the time as a decline in the U.S. Stock market triggered by reports showing an increase in inflation for the month straight. This unexpected rise in the Consumer Price Index raised doubts about rate cuts by the Federal Reserve indicating struggles to control high inflation rates.
During an earnings announcement for the quarter Jamie Dimon, CEO of JPMorgan Chase emphasized economic risks.
He highlighted inflation alongside tensions and the Federal Reserves measures to reduce liquidity. Dimon expressed worries about the effects of extensive liquidity reduction and anticipated continued pressure from inflation that could affect the market further.
These events underscore how unpredictable and sensitive the cryptocurrency market is to factors, like inflation rates and government economic strategies.
