Cryptocurrency Prices Experience Sudden Drop with Liquidations Exceeding $175 Million
The cryptocurrency market experienced a sudden downturn on Thursday afternoon, with top digital currencies like Bitcoin and Ethereum witnessing significant price drops, leading to a wave of liquidations primarily in long positions.
Bitcoin’s value plummeted by nearly 3% in just over an hour, settling at $57,787, while Ethereum experienced a more substantial decline to $2,547 according to CoinGecko data. Other prominent coins such as Solana and Dogecoin also faced substantial losses during this period.
The market volatility resulted in liquidations exceeding $176 million within 24 hours, with a significant portion of $98 million occurring in the last four hours alone. Ethereum saw the most substantial liquidation value of over $59 million in the past day, followed closely by Bitcoin at approximately $50 million.
The exact cause of these rapid declines remains unclear, but it is speculated that cascading liquidations across the crypto market may have contributed to the situation. Prices continued to fall even after the initial reports, with 24-hour liquidations on the rise.
Earlier on Thursday, Bitcoin and Ethereum had displayed volatility following the release of the latest consumer price index (CPI) report on Wednesday. However, the recent dip in prices appears disconnected from macroeconomic factors, as stock prices surged on Thursday despite the crypto market downturn.
In the U.S., the inflation rate dropped to 2.9% in July, marking the lowest annual inflation rate since 2021. Analysts are forecasting aggressive interest rate cuts by the Federal Reserve starting in September to stimulate the U.S. economy, as highlighted by Morningstar’s chief U.S. economist Preston Caldwell.
Despite the crypto market turmoil, U.S. stock markets performed strongly, with the Nasdaq Composite rising by 2.3% in the past 24 hours, while the S&P 500 and Dow Jones Industrial Average saw gains of approximately 1.6% and 1.4%, respectively.
It is essential to note that this article was updated post-publication with additional information.
