Ethereum Price Plummets by 22%, Sparking Significant Market Liquidation
Bitcoin (BTC) recently flirted with dropping below the $50,000 mark for the first time since early February, while Ethereum (ETH) experienced its most significant decline in over a year. According to the latest reports from crypto experts, Ether’s price plummeted by more than 22% in the last 24 hours, settling around $2,294 during Monday’s London session.
This sharp downturn led to over $344 million being liquidated from the leveraged Ethereum market. Surprisingly, Ethereum’s total market capitalization now stands below the substantial cash reserves held by Warren Buffet’s company, which currently sits at approximately $277 billion.
The Ethereum crash was triggered by a notable crypto capitulation that saw more than $1 billion liquidated, coinciding with a downturn in the global stock market. Japan’s stock market experienced its most significant decline since 1987, sparking concerns about a potential global economic recession on the horizon.
As fear of further crypto capitulation mounts with the US markets yet to open, Bitcoin’s fear and greed index dropped below 26%, indicating extreme fear among investors. Notably, Robinhood Markets preemptively halted 24-hour trading due to concerns about a looming liquidity crisis.
Since the approval of US-based spot Ether ETFs, issuers have reported a cumulative net cash outflow of around $510 million. Grayscale’s ETHE holds over $5.97 billion worth of Ether, suggesting more losses could be on the horizon in the coming weeks.
Meanwhile, Jump Trading has been divesting its Ether holdings over the past two weeks, offloading $500 million worth of Ether. Against the backdrop of ongoing uncertainties in the Middle East, the crypto industry may face continued volatility in the market.
Questions loom over whether the macro crypto bull cycle has peaked in recent months, but some indicators hint at a potential rebound in the near future. Additionally, the US Federal Reserve may soon implement interest rate cuts in light of the upcoming general elections.
Historically, the crypto industry has underperformed during August and September but has shown remarkable gains in October. These trends suggest a potential turnaround in the market dynamics in the months ahead.
