- Within 24 hours, nearly $866.37M in futures positions were liquidated across major CEXs.
- Bitcoin, which reached a new ATH at 108K, dropped drastically, affecting the entire market.
- Speculations were rife that Powell’s speech was also a driving force for Bitcoin’s decline.
Within 24 hours, the whole cryptocurrency community was left in disbelief. Nearly $866.37 million in crypto positions were liquidated across major exchanges, hitting 299,277 traders. This includes $752.22 million in long positions and $114.15 million in short positions. Moreover, the U.S. stock market witnessed a severe loss of over $1.05 trillion, with every entity in the red zone.
Bitcoin (BTC), the leading cryptocurrency by market capitalization, dragged the crypto market downwards after crashing from a new all-time high above $108,000 set earlier this month in December. At the time of writing, BTC is valued at $101,018, down by 2.63% in the last 24 hours. Ethereum (ETH) closed 3.96% down at $3,668.25, while Binance Coin (BNB) was 0.83% down, XRP 2.58% down, and Cardano (ADA) 5.62% down.
One of the main triggers for the liquidation is channeled to Jerome Powell’s FOMC speech in which he stated that the “FED cannot own Bitcoin.” This statement indicated that he was not willing to include Bitcoin in the U.S. Treasury, which received stark criticism from the crypto community.
Notably, Satoshi brought in the concept of crypto to eliminate the involvement of banks for traders. Drawing emphasis on the monetary policy and the central bank’s stance on digital assets, Powell stated that the Federal Reserve would not get entwined in the affairs of cryptocurrency but would limit their focus on traditional financial systems.
Is Alt Season Ahead? Analysts Point to Key Market IndicatorsSpeculations were rife that this could have instigated the fall of the market. However, the co-founder of Black Swan Capitalist Vandell stated that Bitcoin’s dip was not connected to Powell but to market manipulation. Further, Vandell stated that a similar event occurred in 2020 during the pandemic period when the market witnessed a price swing.
Last week, Bitcoin dropped by 3%, with $1.76 billion in liquidated positions. Considered to be the largest liquidation event, the coin dropped to $96K during then. Analysts attribute the latest downturn to macroeconomic uncertainties, high-stake profits, and a shift in investor interest.
